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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/03/2009 - ITEMS RELATING TO AN AMENDED AND RESTATED ORGANIC ITEM NUMBER: 17 A-B AGENDA ITEM SUMMARY DATE: March 3, 2009 FORT COLLINS CITY COUNCIL STAFF: Steve Catanach Brian Janonis SUBJECT Items Relating to an Amended and Restated Organic Contract and Contract for the Supply of Electric Power and Energy. RECOMMENDATION Staff recommends adoption of the Ordinances on First Reading. On January 20, 2009, Electric Board voted unanimously to recommend the approval of the Contracts. John Graham was absent from the meeting. Tom Barnish and John Harris recused themselves from the discussion and vote because of their association with Platte River Power Authority. The final vote was 4-0 in favor of recommending approval of the Contracts. EXECUTIVE SUMMARY A. First Reading of Ordinance No. 026, 2009, Authorizing an Amended and Restated Organic Contract for Platte River Power Authority. B. First Reading of Ordinance No. 027,2009,Authorizing an Amended and Restated Contract With Platte River Power Authority For the Supply of Electric Power and Energy. The Organic Contract between the four member cities of Estes Park, Fort Collins, Longmont and Loveland was originally signed in 1975 and last amended in 1998. The Organic Contract forms Platte River Power Authority. A change to the Organic Contract requires the approval of all four member municipalities. Most of the changes to the Organic Contract are in the nature of updates intended to reflect current organizational practices, as detailed more fully below. In addition, staff and Platte River have negotiated changes to update the Contract for the Supply of Electric Power and Energy and termination of the Transmission Facilities Agreement. Changes to the Contract for the Supply of Electric Power and Energy incorporate relevant terms from the Transmission Facilities Agreement. The most significant change to the Contract is a provision which allows the City to develop generation resources up to 3,000 kilowatts to supply City facilities; this is approximately 60%of City facilities demand. The agreement does not limit the size or ability of customers to install generation resources for their own use,nor for third party developers to install generation at a customer's site. March 3, 2009 -2- Item No. 17 A-B BACKGROUND February 3, 2009 Council Meeting On February 31 2009, Council requested that staff and Platte River Power Authority revise the suggested changes to the "whereas" clauses and the purpose statement contained in the Organic Contract. The statements have been revised to directly state Platte River's commitment to environmental stewardship. The requested changes to the Organic Contract are below: WHEREAS, the Municipalities are committed to the delivery of electricity that is generated in a manner that reflects good stewardship of the environment; and WHEREAS, it is the intent of the Municipalities that the Authority demonstrate its commitment to environmental stewardship through practices incorporated into its fundamental operations; and WHEREAS,the Authority's Board of Directors adopted Resolution number 25-08 in 2008 directing the Authority's General Manager to develop a plan outlining how the Authority proposes to achieve the goals of the Colorado Climate Action Plan and to work toward achieving them; and WHEREAS, in December 2002, the Authority's Board of Directors implemented an updated Environmental Policy and Principles document.which requires the Authority to consider environmental factors as an integral part of planning, design, construction and operations decisions; and WHEREAS,the Municipalities acting in concert through the Authority wish to continue their commitment to provide electric power and energy with cost- effective energy resource options in a manner that reflects good stewardship of the environment; and WHEREAS,the Municipalities acting in concert through the Authority wish to continue their commitment to provide electric power and energy with environmentally responsible resource options that enhance the sustainability of the Northern Colorado region; and The additional language added to Section 2.1(i), 2.2(i) and 2.2(vi) is underlined below. 2.1 PURPOSES The purposes of the Authority are to conduct its business and affairs for the benefit of the Municipalities and their inhabitants (i) to provide the electric power and energy requirements of the Municipalities and the retail customers within the Municipalities in a reliable and cost effective manner that reflects high standards of environmental stewardship and sustainability; March 3, 2009 -3- Item No. 17 A-B 2.2 FUNCTIONS, SERVICES, OR FACILITIES (i) acquiring,constructing,owning,reconstructing,improving,rehabilitating,repairing, operating and maintaining electric generating plants, transmission systems and related facilities, or interests therein,for the purpose of producing,transmitting and delivering to the Municipalities, electric power and energy to the extent of their requirements,including renewable energy requirements and demand side resources; (vi) developing products and services to improve the efficiency of generation, transmission and use of electrical energy and to minimize the associated environmental impacts; In response to direction given at the February 3, 2009 Council meeting, language was added to the Power Supply Agreement as detailed below: Article 3: Covenants of Platte River (c) Platte River shall consider the environmental impacts of the planning, design, construction, and operating decisions associated with the performance of its obligations under this Agreement. October 28,2008 work session During the October 28,2008 work session,Council discussed both the Amended Energy and Power Supply Contract between the City of Fort Collins and Platte River Power Authority, and the Amended and Restated Organic Contract between the Cities of Fort Collins, Longmont, Loveland and Estes Park. Discussion in reference to the Energy Supply Contract centered on new language that allows the City to develop and own generation to serve the electric energy demands of its own facilities. The previous Energy Supply Contract limited the City's ability to self generate to zero. The revised contract proposes a limit of one percent of the peak load within Fort Collins, which amounts to approximately 3,000 kW of generation (about 60% of the load for all city facilities). Council expressed concern over the 1% cap and asked why it couldn't be 2%, 3% or even greater. Joe Wilson, Platte River General Counsel, provided a detailed explanation. Previous bonds sold by Platte River were sold with a commitment to the buyers that Platte River would be the sole provider to the four cities. Platte River has been aware of the cities' desire to support, provide, and develop renewable resources. Discussions with Platte River's Bond Counsel resulted in an agreement that the 1%cap could be considered de minimis. At the request of the Utilities Executive Director,Platte River requested information from its Bond Counsel on the potential to increase the limit on generation for City facilities up to 10%. A copy of the response is attached. Council also commented on a document Brian Moeck distributed before the meeting detailing Platte River's commitment to environmental concerns and stewardship. Council complimented Platte River on its efforts, and asked if language could be added to the "whereas" clauses and the "purpose"section of the Organic Contract reflective of Platte River's commitment to environmental stewardship. March 3, 2009 -4- Item No. 17 A-B Revisions to the Organic Contract In June of 1975,the municipalities of Fort Collins,Longmont,Loveland and Estes Park established Platte River Power Authority to develop both resources for the production of electric energy and transmission infrastructure to deliver electric energy to the four member municipalities. The Organic Contract Establishing Platte River Power Authority as a Separate Governmental Entity dated June 17, 1975, defined the roles of each of the municipalities within the organizational structure of Platte River,defined membership on the Board of Directors,and established the by-laws within which the Board operates. In July of 1998 the Organic Contract was amended to allow Platte River to provide additional functions, services or facilities to any combination of two or more of the member municipalities. An example of an expanded service is Platte River's provision and management of the Banner Customer Information System used by both Longmont and the City of Fort Collins. The modification also allowed Platte River to enter into telecommunication activities,which it continues to manage for the City. The amendments that staff and Platte River are presenting to Council in the Amended and Restated Organic Contract Establishing Platte River Power Authority as a Separate Governmental Entity(the "Updated Organic Contract") add to the services that Platte River may provide to Fort Collins by noting that Platte River will assist Fort Collins in reaching its renewable energy requirements. Language has been added which specifically details that Platte River will provide services and products that improve the efficiency of generation, transmission and use of electrical energy. The proposed changes also bring current the expiration dates of the terms of the Platte River appointed directors. Those dates are as follows: December 31, 2011 for Estes Park, December 31, 2008 for Fort Collins, December 31, 2010 for Longmont and December 31, 2009 for Loveland. Additional changes allow Board members to participate in Board meetings via teleconferencing. Changes also provide authority to the Board to appoint an interim Platte River General Manager if and when a vacancy exists in that office. The previous provision automatically designated the Board Chairperson. The Updated Organic Contract also extends the term of the Contract from an end date of 2040 to 2050. Revisions to the Amended Contract for the Supply of Electric Power and Energy Fort Collins and Platte River are proposing an Amended Contract for the Supply of Electric Power and Energy (the "Updated Energy Supply Contract"). The Transmission Facilities Agreement between Platte River and Fort Collins dated February 22, 1980 will be terminated with the execution of the Updated Energy Supply Contract. Some of its terms are incorporated into the new Contract while others are addressed in Appendix B to the Updated Energy Supply Contract. The Updated Energy Supply Contract obligates Platte River to sell and deliver and Fort Collins to purchase and receive all electrical energy which Fort Collins requires. In effect, it is an all- requirements contract with an exception as described below. The Contract defines the roles and responsibilities of each of the entities with respect to providing electric energy, the disposition of excess energy,the responsibility to maintain adequate rates, and required compliance with Western Area Power Administration requirements for the purchase of federally generated power. March 3, 2009 -5- Item No. 17 A-B The above-noted exception to the all-requirements obligation addresses the amount of generation the City can develop to provide service to City-owned facilities. The contract as it currently stands limits the amount of generation the cities could develop for their own use. The member cities were able to keep any generation resources they owned prior to the establishment of Platte River, which allowed Longmont and Loveland to continue to own and operate their small hydro-electric plants. Fort Collins had no such resources. The amended contract designates municipal generation up to 1% of peak as de-minimus. The amendment will have a very positive effect on the City. Fort Collins will be able to develop approximately 3000 kilowatts of renewable generation.The total load associated with city facilities is about 5000 kilowatts, so more than half of this could be met with municipal generation(renewable or other resources).Three thousand kilowatts is enough generation to power approximately 1,000 to 1,200 homes. Depending on the resource developed, three thousand kilowatts of generation could reduce carbon dioxide emissions by between 7,000 to 19,000 tons per year. The amended contract does not limit the amount or size of generation customers can install at their homes or businesses. The option for customers to develop their own generation has always existed and is not impacted by this amended contract. Fort Collins and Platte River jointly occupy all of the substations serving the City. The proposed changes clarify that each party has license to occupy any substation where the parties jointly use facilities. The language of the Updated Energy Supply Contract clarifies the planning requirements and the timelines needed to insure that adequate time is given for the siting, design and construction of new transmission and substation facilities. For example, it reduces from four years to two years the prior notification the City must give Platte River of the need for a new substation if no new transmission is required. If new transmission is required the City must give Platte River four years notification. The Energy Supply Contract term is also extended from 2040 to 2050. This is of critical importance because the power supply agreements between Platte River and the cities are security for Platte River bonds and these agreements must have terms beyond the terms of the bonded indebtedness. Appendix B to the Updated Energy Supply Contract specifies the responsibilities of each entity as either the owner or joint user of a facility. The responsibilities for site work, foundation construction, and operation and maintenance tasks are defined in Appendix B. Platte River purchases energy from the Western Area Power Administration(WAPA) on behalf of the Cities. The WAPA General Power Contract Provisions have been added as an exhibit to the Energy Supply Contract. The amendments to both agreements give additional flexibility to both Platte River and the City in addressing Governor Ritter's goal to reduce the City's carbon emissions by 20%below 2005 levels by 2020 and 80% below 2005 levels by 2050. Both the City and Platte River have committed themselves through formal resolutions to reaching these goals. The development or acquisition of additional renewable resources along with the implementation of energy efficiency programs and services by Platte River, and the City's ability to develop renewable resources for its own use, provide both Platte River and the City new avenues towards this goal. Additionally, the amendments provide clarity to the roles and responsibilities of each entity. March 3, 2009 -6- Item No. 17 A-B ATTACHMENTS 1. Red line copy of the Amended and Restated Organic Contract. 2. Red line copy of Amended Contract for the Supply of Electrical Power and Energy. 3. Existing Transmission Facilities Agreement. 4. October 28, 2008 Council work session summary. 5. Follow up info provided to Council after October 28, 2008 work session. 6. Memo detailing cost to develop distribution level renewables. 7. Letter from Sherman& Howard LLC regarding Fort Collins Inquiry concerning Municipal Generation. 8. Electric Board minutes - January 20, 2009. 9. Letter of Recommendation from Electric Board. 10. Letter from Brian Moeck to Council. ATTACHMENT RAFT PLATTE RIVER POWER AUTHORITY ORGANIC CONTRACT TABLE OF CONTENTS 1.0 EFFECTIVE DATE...............................................................................................................3 2.0 ESTABLISHMENT OF PLATTE RIVER POWER AUTHORITY................................................3 2.1 PuRPosEs.................................................................................................................3 2.2 FUNCTIONS,SERVICES, OR FACILITIES ...................................................................5 2.3 BOARD OF DIRECTORS..............................................................................................6 2.4 OFFICERS................................................................................................................12 2.5 INDEMNIFICATION OF OFFICERS AND DIRECTORS ...............................................15 2.6 TERM OF CONTRAcr..............................................................................................15 2.7 ASSETS AND PROPERTIES........................ ..............................................................16 2.8 DISTRIBUTION OF ASSETS UPON TERMINATION ...................................................16 2.9 SEAL.......................................................................................................................16 2.10 CONTRACTS...........................................................................................................17 2.11 CHECKS,DRAFTS, AND OTHER FINANCIAL DOCUMENTS....................................17 2.12 DEPOSITS................................................................................................................17 2.13 FISCALYEAR..........................................................................................................17 2.14 PRINCIPAL PLACE OF BUSINESS ............................................................................17 3.0 GENERAL POWERS..........................................................................................................17 4.0 POLITICAL SUBDIVISION.................................................................................................21 5.0 REVENUE BONDS............................................................................................................21 6.0 DEBT NOT THAT OF MUNICIPALITIES............................................................................21 7.0 FILING OF CONTRACT.....................................................................................................21 8.0 NOTICES..........................................................................................................................21 9.0 SEVERABILITY..................................................................................................................22 10.0 DUPLICATE ORIGINALS..................................................................................................22 i AMENDED AND RESTATED ORGANIC CONTRACT ESTABLISHING PLATTE RIVER POWER AUTHORITY AS A SEPARATE GOVERNMENTAL ENTITY THIS CONTRACT, originally made and entered into as of June 17, 1975, and amended February 14, 1977, and July 27, 1978, and amended and restated the 31-,1 day of March 1980, and the 1s,day of Iuly, 1998,and as further amended and restated on this 4sf day of-kay 998_ 2009, by the parties to this Contract which are: TOWN OF ESTES PARK, COLORADO, a municipal corporation of the State of Colorado ("Estes Park"), CITY OF QT- OF, FORT COLLINS, COLORADO, a municipal corporation of the State of Colorado ("Fort Collins"), CITY OF LONGMONT, COLORADO, a municipal corporation of the State of Colorado ("Longmont"), and CITY OF LOVELAND, COLORADO,a municipal corporation of the State of Colorado ("Loveland"). When specificity is not required, the municipal corporations which are parties hereto will hereinafter be individually referred to as "Municipality" and collectively as "Municipalities-,_" WITNESSETH: WHEREAS, Estes Park owns and operates a municipal electric system which supplies electric power and energy at retail to users located within the town limits of Estes Park and the adjacent service area of the Estes Park electric system; and WHEREAS, Fort Collins owns and operates a municipal electric system which supplies electric power and energy at retail to users located within the city limits of Fort Collins; and WHEREAS,Longmont owns and operates a municipal electric system which supplies electric power and energy at retail to users located within the city limits of Longmont and the adjacent service area of the Longmont electric system;and WHEREAS, Loveland owns and operates a municipal electric system which supplies electric power and energy at retail to users located within the city limits of Loveland and the adjacent service area of the Loveland electric system;and WHEREAS, the Municipalities on June 17, 1975, established, pursuant to the provisions of C.R.S. (197-3)-§ 29-1-204, as then enacted,-the Platte River Power Authority (the "Authority"), as a separate governmental entity and successor to a gen pr-e Rnonprofit corporation, to be the Organic Contract Amended and Restated 02/24/2009 Page] of 23 instrumentality of the Municipalities and as such successor, to continue to supply their wholesale electric power and energy requirements;and WHEREAS, during 1998 the Municipalities ontracted with one another to establish, pursuant to the provisions of C.R.S. Sec-tiea& 29-1-203, the Authority as a separate legal entity and multi-purpose intergovernmental authority to provide designated functions, services, or facilities(0 lawfully authorized to any combination of two or more of the Municipalities ) w#iehprovided that such function, service, or facility constitutes an "enterprise" as defined in See§eesubsection 2(d) of Article X, Section 20 of the Colorado Constitution;and WHEREAS, tw- advpnt F4 v halesale eampetigenincreased complexity and the anticipation of fetag .�eehag and isk in the electric utility industry have created the need to 4i)-enhance utility image and customer loyalty-by4meadening , the Municipalities wish to clarify that the Organic Contract authorizes the Authority to engage in a broad range of s>a dated services which are incidental to or supportive of the Municipalities' continued ability to provide electric s :ieepower and enerQv services to their customers on a competitive basis-axd-te engage in reWl sales of eleeb4c pewer anti eneiFgy� and;and WHEREAS the Municipalities are committed to the delivery of electricity that is generated in a manner that reflects good stewardship of the environment; and WHEREAS it is the intent of the Municipalities that the Authority demonstrate its commitment to environmental stewardship through Practices incorporated into its fundamental operations;and WHEREAS the Authoritv's Board of Directors adopted Resolution No. 25-08 in 2008 directing the Authority's General Manager to develop a plan outlining how the Authority proposes to achieve the goals of the Colorado Climate Action Plan and to work toward achieving them; and WHEREAS in December 2002, the Authority's Board of Directors implemented an updated Environmental Polkv and Principles document which requires the Authority to consider environmental factors as an integral part of planning design, construction and operations decisions;and Organic Contract Amended and Restated 02/24/2009 Pace 2 of 23 WHEREAS, the Municipalities acting in concert through the Authority wish to continue their commitment to provide electric power and energy with reliable, cost-effective energy resource options in a manner that reflects good stewardship of the environment;and WHEREAS, the Municipalities acting in concert through the Authority wish to continue their commitment to provide electric power and energy with environmentally responsible resource options that enhance the sustainabilih, of the Northern Colorado region;and WHEREAS, the Municipalities now wish to further amend the Organic Contract, to extend its term and to restate the amended provisions thereof in a single updated document. NOW, THEREFORE, the Municipalities do hereby amend and restate the Organic Contract, originally exeatted June 17, 1975, and subsequently amended, so that as hereby amended and restated it provides, and the Municipalities do agree,as follows: 1.0 EFFECTIVE DATE: "This Contract, as hereby amended and restated, shall become effective when it has been duly executed v all of the Municipalities. 2.0 ESTABLISHMENT OF PLATTE RIVER POWER AUTHORITY: -2-.9As of June 17, 1975, the Municipalities establishestablished a separate governmental entity, to be known as Platte River Power Authority (the 'Aatheritf�+, to be used by the Municipalities to effect the development of electric energy resources and the production and transmission of electric energy in whole or in part for the benefit of the inhabitants of the Municipalities. As of July 1, 1998, the Municipalities also estabtiskestablished the Authority as a separate governmental entity and multi-purpose intergovernmental authority to provide additional designated functions, services, or facilities {i}—lawfully authorized to any combination of two or more of the Municipalities and k,_provided that such function, service, or facilities constitutes an "enterprise" as defined in SeefieRsubsection 2(d) of Article X, Section 20 of the Colorado Constitution. 2.1 PURPOSES: Organic Contract Amended and Restated 02/24/2009 Page 3 of 23 -23 The purposes of the Authority are to conduct its business and affairs for the benefit of the Municipalities and their inhabitants:-(A) (i) to provide the electric power and energy requirements of the Municipalities and the retail customers within the Municipalities; (lb} in a reliable,cost-effective manner that reflects high standards of environmental stewardship and sustainability (if) to engage in business activities related to the provision of electric power and energy services and demand side resources which the Board determines are likely to enhance the competitive position of the Authority or the Municipalities-,I and-P (iii) to provide any additional designated function, service, or facility (i -lawfully authorized to any combination of two or more of the Municipalities ,, provided that these constitute an "enterprise' as defined in See43ensubsection 2(d) of Article X,Section 20 of the Colorado Constitution. A particular function, service, or facility shall be treated as designated as a separate purpose under clause (Ciii of the previous sentence only upon receipt by each Municipality which is designating the function, service, or facility to also be performed by the Authority of (a) a resolution adopted by unanimous vote of the Board of Directors of the Authority designating the function,service, or facility as a purpose to also be jointly exercised by the designating Municipalities through the Authority and (b) opinions of counsel to each Municipality which is designating the function,service,or facility to also be performed by the Authority setting forth the extent to which the designated function, service, or facility is lawfully authorized by designating Municipalityi and (c) an opinion of the Authority's bond counsel to the effect that the designated function, service, or facility constitutes an "enterprise" as defined in Organic Contract Amended and Restated 02/24/2009 Page 4 of 23 Seetiensubsection 2(d) of Article X, Section 20 of the Colorado Constitution. 2.2 FUNCTIONS,SERVICES, OR FACILITIES The functions, services, or facilities to be provided by the Authority are: eThe supplying of the electric power and energy requirements of the Municipalities and retail customers within the Municipalitiesi and-R, the provision of any additional function, service, or facilitv444a%4u4ly (4) whieh constitutes an "enterprise" Aq defined In Spctien 2(d) of Artide as by:means of Ac g (i) acquiring, constructing, owning, reconstructing, improving, rehabilitating, repairing, operating and maintaining electric generating plants, transmission systems and related facilities, or interests therein, for the purpose of producing, transmitting and delivering to the Municipalities, electric power and energy to the extent of their requirements, including renewable energy requirements and demand side resources; (h) Purehas RggRLLhasinZelectric power and energy from electric utilities and other producers of energy, as required to supply the Municipalities and perform its other obligations; (iii) Selliingselhng at wholesale to the Municipalities all of the electric power and energy produced or purchased by the Authority which the Municipalities require; (iv) Se1kRgseIhn& exchanging and otherwise disposing of, under the most economically advantageous terms and conditions obtainable, Organic Contract Amended and Restated 02/24/2009 Page 5 of 23 2-3 any cmd all-surplus power and energy or transmfssion capacity which the Authority owns, produces or purchases; (v) Pevelep fydevelo in electric energy resources (including renewable sources) and producing and transmitting electric energy in whole or in part for the benefit of the inhabitants of the Municipalities; (vi) Acquiringdeveloping products and services to improve the efficiency of generation, transmission and use of electrical energy, and to minimize the associated environmental impacts; (NxNvii) acquiring, constructing, owning, purchasing, selling, exchanging; or otherwise disposing of, reconstructing, improving, rehabilitating, repairing, operating, and maintaining assets, infrastructure, plants, systems, and related facilities or interests therein; 4y(viii) evelo in products, services, infrastructure, and resources related to such function, service, or facility for delivery to appropriate markets in whole or in part for the benefit of the inhabitants of the Municipalities; and { 1(ix) Qn r-Preig,;ion-efon termination of this Contract to vest in the Municipalities all right, title and interest of the Authority in or to all of its property and assets. 2.3 BOARD OF DIRECTORS 2.3The governing body of the Authority shall be a Board of Directors in which all legislative power of the Authority is vested. Organic Contract Amended and Restated 02/24/2009 Page 6 of 23 2.3.1 NUMBER--. .3.13The number of Directors shall be eight (8). 2.3.2 SELECTION- 3.3.43Each Municipality shall be represented by two (2) members on the Board of Directors of the Authority, who shall be designated or appointed as follows: (i) MAYORS The Mayor of each of the Municipalities is hereby designated and shall serve as a member of the Board of Directors of the Authority contemporaneously with service as Mayor; provided, however, that any Mayor may designate some other member of the governing board of such Municipality to serve as a Director of the Authority in place of the Mayor. (ii) APPOINTED DIRECTORS The governing body of each of the Municipalities shall appoint one_(11 additional member to the Board of Directors. Appointed Directors shall be selected for judgment, experience, and expertise which des thewmake that person particularly qualified to serve as Shea Director of an electric utility. 2.3.3 TERM: 4-3:43The term of office of the Directors of the Authority shall be as follows: manic Contract Amended and Restated 02/24/2009 Pace 7 of 23 Ei�A4.�s: (i) MAYORS The Mayor of each Municipality, or the member of the Municipality's governing board designated by the Mayor, shall serve as a Director of the Authority for the same period of time that the Mayor serves as Mayor of that Municipality. (ii) APPOINTED DIRECTORS The term of the Appointed Director for Estes Park shall expire on December 31, 49832011, the term of the Appointed Director for Fort Collins shall expire on December 31, 49892_O8 the term of the Appointed Director for Longmont shall expire on December 31, 19922010, and the term of the Appointed Director for Loveland shall expire on December 31, 4981-2009. Each successor shall be appointed for a term of four years from the date of the expiration of the term for which the predecessor was appointed and until the s ted and has qualified. 2.3.4 REMOVAL: 5-S:43Any Director appointed by the governing board of a Municipality may be removed at any time by such governing board, with or without cause. A Mayor will be automatically removed as a Director upon vacating the office of Mayor, and a member of the Municipality's governing board designated to serve in place of a Mayor may be removed at any time by the Mayor, with or without cause. Organic Contract Amended and Restated 02/24/2009 Pace 8 of 23 -24 2.3.5 VACANCIES+ 6313A vacancy occurring in the directorship of an Appointed Director, whether such vacancy be the result of resignation, death, removal or disability, shall be filled by the appointment of a successor Appointed Director by the governing body of the Municipality which appointed the Director whose office has become vacant. In the case of a vacancy in the directorship of a Mayor or his designee from any Municipality, the vacancy shall be filled by the new Mayor or the Mayor's designation of some other member of the governing board of that Municipality. 2.3.6 COMPENSATION+ 'Directors shall not receive compensation for their services, but •'-Directors may, ,:.. bran.,,_ en. Pire er cbe reimbursed their actual expenses for attendance at meetings of the Board of Directors and for expenses otherwise incurred on behalf of the Authority. 2.3.7 ANNUAL MEETINGS 9..3-13An annual meeting of the Board of Directors shall be held within the first 120 days in each year at such place in Fort Collins, Colorado, as shall be designated in the notice of the meeting, to elect officers, to pass upon reports for the preceding fiscal year, and to transact such other business as may come before the meeting. Failure to hold the annual meeting at a designated time, or failure to hold the annual meeting in any year, shall not cause a forfeiture or dissolution or otherwise affect the Authority. Organic Contract Amended and Restated 02/24/2009 Page 9 of 23 24 9-1-32.3.8 REGULAR MEETING& The Beafd of DiFe tern may c..em The Board of Directors may provide for the time and place for the holding of regular meetings by resolution without notice to Directors other than the resolution adopting the meeting schedule. 2.3.9 SPECIAL MEETINGS '^Special meetings of the Board of Directors may be called by the Chairman or any Director and it shall thereupon be the duty of the Secretary to cause notice of such meeting to be given as hereinafter provided. Special meetings of the Board of Directors shall be held at such time and place within the State of Colorado as shall be fixed by the Chairman or the Director calling the meeting. 2.3.10 NOTICE OF MEETINGS: U4—.BWritten notice of the annual or of any special meeting of the Board of Directors shall be delivered to each Director not less than seven (7), nor more than thirty-five (35), days before the date fixed for such meeting, either personally or by mail, by or at the direction of the Secretary, or, upon his/her default, by the person calling the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the Director at his/her address as it appears on the records of the Authority,with postage thereert prepaid. 2.3.11 WAIVER OF NOTICE: Organic Contract Amended and Restated 02/24/2009 Page 10 of 23 12.3.13Whenever any notice is required to be given to any Director of the Authority under the provisions of the law or this Contract,a waiver thereof in writing signed by such Director, whether before or after the time stated therein, shall be equivalent to the giving of such notice. Attendance of a Director at any meeting of the Board of Directors shall constitute a waiver by such Director of notice of such meeting except when such Director attends such meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. 2.3.12 QUORUM: 13.3.13A majority of the number of Directors then in office shall constitute a quorum for the transaction of business; provided that, if less than a majority of the Directors then in office is present at a meeting, a majority of the Directors present may adjourn the meeting ftem time te ti ie and, provided further, that the Secretary shall notify any absent Directors of the time and place of such adjourned meeting. The act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. 2.3.13 ATTENDANCE BY TELECONFERENCE Directors may attend and fully participate in any meeting through electronic teleconferencing. 2.3.14 VOTE IN CASE OF A-DEADLOCK 14.3431n the event the Board of Directors, at a meeting at which a quorum is present, is deadlocked and unable to obtain a majority vote of the Directors present concerning a matter being considered for action, any Director may require a "Weighted Vote." A "Weighted Vote" shall then be taken with each Director's vote being given one half the proportion which: Organic Contract Amended and Restated 02/24/2009 Page 11 of 23 2.3 (i)—the dollar amount of electric power and energy purchased from the Authority during the twelve-month period ending with the close of the billing period for the month two months prior to the month of the deadlocked meeting and paid for by the Municipality appointing such Director bears to; bears to (ii) the dollar amount of all electric power and energy purchased from the Authority and paid for by the Municipalities during said twelve-month period. The act of a majority of the "Weighted Vote" shall be the act of the Board of Directors. c�2.3.15 DUTIES- Th a..&,.s of the geaFd of rv_,.._tem ..hall hp- The duties of the Board of Directors shall be: (i) To govern the business and affairs of the Authority. (ii) To exercise all powers of the Authority. (iii) To comply with the provisions of parts 1, 5, and 6 of Article 1 of Title 29-of,C.R.S. (197-3). (iv) To adopt a fiscal resolution, which complies with statutory and other restrictions imposed by law on the affairs of the Authority, to govern the financial transactions of the Authority, including the receipt, custody, and disbursement of its funds, securities, and other assets, and Organic Contract Amended and Restated 02/24/2009 Pace 12 of 23 -23 to provide for the services of a firm of independent certified public aaccountants to examine, at least annually, the financial records and accounts of the Authority and to report thereupon to the Board of Directors. (v) To keep minutes of its proceedings. 2.4 OFFICERS 24The officers of the Authority shall be a Chairman, Vice Chairman, Secretary, Treasurer, General Manager and such other officers and assistant officers as may be authorized by the Board of Directors 49M ti-t time to perform such duties as may be appFe*edassigned by the Board of Directors. The Chairman and Vice Chairman shall be members of the Board of Directors, but other officers of the Authority need not be members of the Board of Directors. 2.4.1 ELECTION OF OFFICERS AND TERMS OF OFFICE: ;3At each annual meeting of the Board of Directors, the members of the Board of Directors shall elect officers who shall serve as such officers of the Authority until the next suc-ceedi annual meeting of the Board of Directors and until their successors are elected and qualified. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as may be convenient. Vacancies or new offices may be filled at any meeting of the Board of Directors. 2.4.2 REMOVAL. 3X.43Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors, with or Organic Contract Amended and Restated 02/24/2009 Page 13 of 23 �a without cause, whenever in its judgment the best interests of the Authority will be served thereby. 4-.2,.-P2.4.3 DUTIES OF OFFICER the f@ll8Wi`S Chair-ma In addition to duties assigned by the Board of Directors, the duties of the officers shall include the following: (i) CHAIRMAN The Chairman shall preside at all meetings of the Board of Directors and, except as otherwise delegated by the Board of Directors, shall execute all legal instruments of the Authority. and shall perform such other duties as the Board of Directors may prescribe f�Rm time to time. rv. . (ii) VICE CHAIRMAN The Vice Chairman shall, in the absence of the Chairman, or in the event of#isthe Chairman's inability or refusal to act, perform the duties of the Chairman and when so acting shall have all the powers of and be subject to all the restrictions upon the Chairman. The Vice Chairman shall also perform such other duties as may be prescribed by the Board of Director. Organic Contract Amended and Restated 02/24/2009 Pace 14 of 23 (iii) SECRETARY The Secretary shall maintain the official records of the Authority, including all resolutions and regulations approved by the Board of Directors, the minutes of meetings of the Board of Directors, and a register of the names and addresses of Directors and officers, and shall issue notice of meetings, attest and affix the corporate seal to all documents of the Authority, and shall perform such other duties as the Board of Directors may prescribefrea� Fiore to ti$ie. rag TfeaeuT-ef (iv) TREASURER The Treasurer shall serve as financial officer of the Authority and shall, pursuant to the fiscal resolution adopted by the Board of Directors governing the financial transactions of the Authoritv and the restrictions imposed by law, be responsible for the receipt, custody, investment, and disbursement of the Authority's funds and securities and for duties incident to the office of Treasurer, and shall perform other duties as the Board of Directors may prescri . (v) GENERAL MANAGER Organic Contract Amended and Restated 02/24/2009 Page 15 of 23 -23 The General Manager shall be the principal executive officer of the Authority with full responsibility for the planning, operations, and administrative affairs of the Authority, and the coordination thereof, pursuant to policies and programs approved by the Board of Directors fire ffie, and shall be the agent for service of process on the Authority. When and while a vacancy exists in the office of General Manager, the Board of Directors shall appoint a qualified interim General Manager to act as the principal executive officer of the Authority. 2.4.4 BONDS OF OFFICERS 5-344The Treasurer and any other officer or agent of the Authority charged with responsibility for the custody of any of its funds or property shall give bond in such sum and with such surety as the Board of Directors shall determine. The Board of Directors in its discretion may also require any other officer, agent, or employee of the Authority to give bond in such amount and with such surety as it shall determine. The cost of such bond shall be an expense payable by the Authority. 2.5 INDEMNIFICATION OF OFFICERS AND DIRECTORS 2-.5Each Director and officer of the Authority, whether or not then in office, and hiss personal representatives, shall be indemnified by the Authority against all costs and expenses actually and necessarily incurred by himLhgr in connection with the defense of any action, suit, or proceeding in which he she may be involved or to which hem may be made a party by reason of hiss being or having been such Director or Organic Contract Amended and Restated 02/24/2009 Page 16 of 23 2a officer, except in relation to matters as to which hem shall be finally adjudged in such action, suit, or proceeding to be liable for gross negligence or willful etand wanton aeg g ne misconduct in the performance of duty. Such costs and expenses shall include amounts reasonably paid in settlement for the purpose of curtailing the costs of litigation, but only if the Authority is advised in writing by its counsel that in hiss opinion the person indemnified did not commit svehwoss negligence or willful eFand wanton -= gene er misconduct. The foregoing right of indemnification shall not be exclusive of other rights to which he/she may be entitled as a matter of law or by agreement. 2.6 TERM OF CONTRACT: 2:6This Contract shall continue in force and effect until December 31, 28492J and until thereafter terminated by any Municipality following not less than s"twelve 12) months written notice to the other Municipalities of its intention to terminate; provided, however, that this Contract may be amended, modified, reseindedr or terminated at any time by a written document approved and executed by each and every Municipality which is a party to this Contract; and, provided further, however, that this Contract may not in any event be F:eseia-'ed terminated so long as the Authority has bonds, notes, or other obligations outstanding, unless provision for full payment of such obligations, by escrow or otherwise, has been made pursuant to the terms of such obligations. 2.7 ASSETS AND PROPERTIES- 2.7A11 assets and properties of the Authority shall be held in trust for the purposes herein mentioned, including the payment of the liabilities of the Authority. 2.8 DISTRIBUTION OF ASSETS UPON TERMINATION: Organic Contract Amended and Restated 02/24/2009 Paee 17 of 23 "In the event of the reseissian er termination of this Contract and the dissolution of the Authority, all of its assets shall immediately vest in the Municipalities. The assets of the Authority conveyed to each Municipality shall be that proportion which (i) the total dollar amount of electric power and energy purchased and paid for by such Municipality, from the Authority and its predecessor during their corporate existence, bears to (ii) the total dollar amount of all electric power and energy purchased and paid for by all of the Municipalities, from the Authority and its predecessor during their corporate existence. 2.9 SEAL. 2:9The corporate seal of the Authority shall be in the form of a circle and have inscribed thereon the name of the Authority and the words "Corporate Seal," together with such insignia, if any, as the Board of Directors may authorize. 2.10 CONTRACTS: 2BExcept as otherwise provided by law, the Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract,or execute and deliver anv instrument in the name and on behalf of the Authority. 2.11 CHECKS, DRAFTS, AND OTHER FINANCIAL DOCUMENTS= All checks, drafts, or other orders for payment of money and all notes,bonds, or other evidences of indebtedness issued in the name of the Authority shall be signed by such officer or officers, agent or agents, employee or employees of the Authority and in such manner as shall Abe determined by the fiscal resolution 14ecters. 2.12 DEPOSITS: Organic Contract Amended and Restated 02/24/2009 Paee 18 of 23 23 All funds of the Authority shall be deposited cr-edw and pur-suant to law, in such hank er-IgAnks in a manner set forth by the cal resolution. 2.13 FISCAL YEAR: 2443The fiscal year of the Authority shall be the calendar year. 2.14 PRINCIPAL PLACE OF BUSINESS- The principal place of business of the Authority shall be in Fort Collins, Colorado. 1-04-h dhe Division of I-oral Gsvermm.pn4 the Ramp ef the agent for- ser-%4ce business. 244 3.0 GENERAL POWERS 3 QThe general powers of the Authority shall include the following powers: (i) ELECTRIC ENERGY: 44To develop electric energy resources and related services, and produce, purchase, and transmit electric energy, in whole or in part, for the benefit of the inhabitants of the Municipalities. (ii) CONTRACTS 4-2To make and enter contracts of every kind with the Municipalities, the United States, any state or political subdivision thereof, and any individual, firm, association, partnership, corporation or any other organization of any kind. 4-3(iii) AGENTS AND EMPLOYE To emplov agents and employees. Oreanic Contract Amended and Restated 02/24/2009 Paee 19 of 23 (iv) FACILITIES-- 4.4To acquire, construct, manage, maintain, and operate electric energy facilities, works, and improvements and any interests therein, including, without limitation, to acquire, construct, reconstruct, improve, and rehabilitate, repair, operate, and maintain (separately or jointly) generating plants, transmission systems and related facilities for the purpose of delivering electrical power and energy generated thereby to the Municipalities, and any mine, well, pipeline,plant, structure, or other facility for the development, production, manufacture, storage, fabrication, or processing of fossil or nuclear fuel of any kind for use, in whole or in major part, in any of such generating plants, and any railroad cars, trackage, pipes, equipment, and any structures or facilities of any kind used or useful in the transporting of fuel to any of such generating plants, and to sell, deliver, exchange, or otherwise dispose of the power and energy generated by said plants, and any of the waste or by-products therefrom, and to purchase, lease, or otherwise acquire and equip, maintain, operate, sell, assign, convey, lease, mortgage, pledge, and otherwise dispose of electrical generating plants, transmission systems and related facilities, together with all lands, buildings, equipment, and all other real or personal property, tangible or intangible, necessary or incidental thereto. (v) PROPERTY-. 44To acquire, hold, lease (as lessor or lessee), sell, or otherwise dispose of any real or personal property, commodity, and service including, without limitation, to buy, lease, construct, appropriate, contract for, invest in, and otherwise acquire, and to own, hold, maintain, equip, operate, manage, improve, develop, mortgage, and deal in and with, and to sell, lease, exchange, transfer, convey and otherwise dispose of and to Organic Contract Amended and Restated 02/24/2009 Pace 20 of 23 mortgage, pledge, hypothecate and otherwise encumber real and personal property of every kind, tangible and intangible. (vi) CONDEMNATION-. 4-ATo condemn property for public use, if such property is not owned by any public utility and devoted to such public use pursuant to state authority. (vii) DEBT-. 4-.7To incur debts, liabilities, or obligations and to borrow money and, from time to time, to make, accept, endorse, execute, issue, and deliver bonds, debentures, promissory notes, bills of exchange, and other obligations of the Authority for monies borrowed or in payment for property acquired or for any of the other purposes of the Authority, and to secure the payment of any such obligations by mortgage,pledge, deed, indenture, agreement, or other collateral instrument, or by other Gen upon, assignment of, or agreement in regard to, all or any part of the properties, rights,assets, contracts, easements, revenues, and privileges of the Authoritv wherever situated. 4$(viii) LITIGATION, Tssappinibe sued in its ewnnafne. To sue and be sued in its own name. (ix) SEAL: 4-ATo have and to use a corporate seal. (x) RATESs 44OTo fix, maintain, and revise fees, rates, and charges for functions, services, or facilities provided by the Authority. (xi) REGULATIONS: Organic Contract Amended and Restated 02/24/2009 Page 21 of 23 4.44To adopt, by resolution, regulations respecting the exercise of its power and the carrying out of its purposes. (xii) AGENTS: 4.42To do and perform any acts and things authorized by this section under, through, or by means of an agent, or by contracts with any person, firm, corporation or governmental entity. (xiii) JOINT OWNERSHIP: 443To own, operate, and maintain real and personal property, and facilities in common with others, as permitted by law, and to conduct joint, partnership, cooperative, or other operations with others and to exercise all of the powers granted in this Contract in joint partnership or cooperative efforts and operations with others. (xiv) OTHER POWERS 444To exercise any other powers which are essential, necessarv, incidental, convenient, or conducive to providing the wholesale electric power and energy requirements of the Municipalities, as well as to accomplishing the purposes, functions, services, and facilities set forth in Sections 2.0,2.1, and 2.2 of this Organic Contract. 4.0 POLITICAL SUBDIVISIOM 59The Authority shall be a political subdivision and a public corporation of the State of Colorado separate from the Municipalities. It shall have the duties, privileges, immunities, rights, liabilities, and disabilities of a public body politic and corporate. 5.0 REVENUE BONDS Oceanic Contract Amended and Restated 02/24/2009 Page 22 of 23 23 "The Authority is authorized to issue bonds, notes, or other obligations secured by its electric revenues pursuant to the terms, conditions, and authorization contained in 4973C.R.S. §29-1-204(7). 6.0 DEBT NOT THAT OF MUNICIPALITIES. -.9The bonds, notes, and other obligations of the Authority shall not be the debts, liabilities, or obligations of the Municipalities, IN A TTL' �ET7 nll1A7L,IRR A T TT14OT7 TTV Autherit),sha1l held aJ4 riots, interests, priN,ileges, and pr-apef:ties A and shall aqsum- 7.0 FILING OF CONTRACT-- "A copy of this Contract shall be filed with the Division of Local Government of the State of Colorado withwithin ten (10) days after its execution by the Municipalities. 8.0 NOTICES.-- "Any formal notice, demand, or request provided for in this Contract shall be in writing and shall be deemed properly served, given, or made if delivered in Organic Contract Amended and Restated 02/24/2009 Page 23 of 23 23 person or sent by registered or certified mail, postage prepaid, to the persons specified below: Town of Estes Park, Colorado c/o-A6-4stant Town Adminis trator P.O. Box 1200 Estes Park, Colorado 80517 City of Fort Collins, Colorado c/o Utilities General-M,anagerExecutive Director P.O. Box 580 Fort Collins,Colorado 80522 City of Longmont,Colorado c/o Director of Longmont Power&Communications 1100 South Sherman Longmont,Colorado 80501 City of Loveland, Colorado c/o Water and Power Director 200 North Wilson Loveland, Colorado 80537 9.0 SEVERABILITY=. 4"In the event that any of the terms,covenants, or conditions of this Contract or their application shall be held invalid as to any person, corporation, or circumstance by any court having jurisdiction, the remainder of this Contract Organic Contract Amended and Restated 02/24/2009 Pace 24 of 23 23 and the application and effect of its terms, covenants, or conditions to such persons, corporation, or circumstances shall not be affected thereby. 10.0 DUPLICATE ORIGINALS 11-.0—This een4aetContract may be executed in several counterparts,each of which will be an original but all of which together shall constitute one and the same instrument. Organic Contract Amended and Restated 02/24/2009 Page 25 of 23 -23 IN WITNESS WHEREOF,the Municipalities have caused this Contract, as amended, to be executed as of the 4-4 day of july, 4998. Organic Contract Amended and Restated 02/24/2009 Page 26 of 23 IFk Air City k ATTEST! City QeF! ATTEST: City Cler-I , 2009. TOWN OF ESTES PARK, COLORADO Bv: Mayor By: Nlavor CITY OF LONGNIONT, COLORADO CITY OF FORT COLLINS, COLORADO By: Mayor Organic Contract Amended and Restated 02/24/2009 Page 27 of 23 2-3 CITY OF LOVELAND,COLORADO By: Mayor ATTEST: Town Clerk ATTEST: Citv Clerk ATTEST: Citv Clerk ATTEST: Citv Clerk Organic Contract Amended and Restated 02/24/2009 Page 28 of 23 AMENDED CONTRACT FOR THE SUPPLY OF ELECTRIC POWER AND ENERGY This contract, made this 4-4 day of htbt7�498 , 2009, between PLATTE RIVER POWER AUTHORITY,a political subdivision organized and existing under and by virtue of the laws of the State of Colorado (hereinafter called "Platte River") and the CITY OF FORT COLLINS, COLORADO, a municipal corporation of the State of Colorado (hereinafter called "Fort Coll' " , WITNESSETH: WHEREAS, Platte River was formed by Estes Park, For Collins, Longmont and fnain iai Loveland (hereinafter collectively called "Municipalities") in order to provide the wholesale power and energy requirements of the Municipalities in a cost- effective,sustainable,and environmentally responsible manner;and WHEREAS, Platte River, owns, operates, and maintains electric generating p6a}ttsfacj ties, transmission lines, substations, and related facilities and to—paa for the purpose, , of supplying electric power and energy to wmPdeip9jhe electric systems owned and operated by the Municipalities for resale; and WHEREAS, Platte River has heretofore entered into or will enter into agreements for the sale of electric power and energy similar in form to this Agreement with various ffffinieipa4i 441iripalities");the cities of Estes Park, Longmont,and Loveland;and WHEREAS, this Agreement replaces the Transmission Facilities Agreement between Platte River and Fort Collins,dated February 22, 1980,and WHEREAS, Fort Collins desires to purchase electric power and energy from Platte River on the terms and conditions herein set forth; NOW, THEREFORE, in consideration of the mutual undertakings herein contained, the Parties hereto agree as follows: Article 1: Sale and Purchase of Electric Power and Energy Fort Collins Power Supply Agreement Amended and Restated 02/24/2009 Page 1 of 11 (a) Platte River shall sell and deliver to Fort Collins and Fort Collins shall purchase and receive from Platte River all electric power and energy which Fort Collins shall require for the operation of its municipal electric system to the extent that Platte River shall have such power and energy available; provided, however, that (11)Fort Collins shall have the right to continue to generate its own power and energy to the extent of the capacity of its generating facilities in service on September 5, 1974-. and may also generate Rower and energy for its own use from any new generation resource(s) owned and operated by Fort Collins provided that the total rated capacity of all such new generation is no greater than 1,000 kW or one percent of the Reak load of Fort Collins, whichever is greater, provided further that if Fort Collins develops new generation resources of a total rated capacity as set forth above Platte River commits that it will meet with Fort Collins to discuss in good faith an increase in the total rated capacity limit, and (2) Fort Collins shall not be in violation of the all requirements purchase obligation herein when it purchases power from net metered customers. Subject to the provisions of Article 2(a), Fort Collins hereby binds itself to take and pay for all power and energy that is generated, purchased, or otherwise obtained by Platte River, and is furnished to Fort Collins for resale pursuant to Article 1(a) hereof, said payment to 2)--be made at the fate se-hedulerates set eti forth in anti Fnade a part hereA or- such amendEnents thereto as may the Tariff Schedules of Platte River in effect at the time the power and energy is furnished to thne pfe-idedFort Collins. Article 2: Rate for Power and Energy (a) Fort Collins shall pay Platte River for all electric power and energy furnished hereunder at the Faterates and on the terms and conditions set for- as E!rovided in Attadunext lithe Platte River Tariff Schedules provided, however, that notwithstanding any other provision of this Agreement, the obligation of Fort Collins to pay Platte River for all electric power and energy furnished hereunder shall be, and is, a special obligation of Fort Collins payable solely from revenues to be received by Fort Collins from the sale of electric power and energy to its electric utility customers during the term hereof and is not a lien, charge, or liability against Fort Collins or against any property or funds of Fort Collins other than revenues to be received by Fort Collins from the sale of electric power and energy to its electric Fort Collins Power Supply Agreement Amended and Restated 02/24/2009 Page 2 of 11 utility customers during the term hereof, and the obligation to pay Platte River for all electric power and energy furnished hereunder does not constitute a debt, liability, or obligation of Fort Collins other than from its revenues to be received from the sale of electric power and energy to its electric utility customers during the term hereof, and Fort Collins is not otherwise obligated to pay such obligation. (b) The Board of Directors of Platte River at such intervals as it shall deem appropriate, but in any event not less frequently than once in each calendar year, shall review the faterates for electric power and energy furnished hereunder and under similar agreements with the other Municipalities and, if necessary, shall revise such __.., dgat it sh.a4kates to produce revenues which shall be sufficient, but only sufficient, with the revenues of Platte River from all other sources, (i) to meet the cost of operation and maintenance (including, without limitation, fuel replacements, insurance, taxes fee and administrative and general overhead expense) of the electric generating plants, transmission system, and related facilities of Platte River; 1( )ri to meet the cost of any power and energy purchased for resale hereunder by Platte River and the cost of transmission service; iii to make payments of principal and interest on all indebtedness and revenue bonds of Platte River and provide an earnings margin adequate to enable Platte River to obtain revenue bond financing on favorable terms; and ( ia�(iv) to provide for the establishment and maintenance of reasonable reserves. (c) Platte River shall cause a notice in writing to be given to each Municipality to which it furnishes electric power and energy, which notice shall set out each prepesed revision of the raterates with the effective date thereof, which shall be not less than thirty (30) days after the date of the notice, affd sha4 set ferth the basis upon %xh-ieh th-- rate is Proposed to be adjusted and established . All rate adjustments shall apply equally to all Municipalities to Fort Collins Power Supply Agreement Amended and Restated 02/24/2009 Page 3of11 which Platte River furnishes electric power and energy, unless otherwise agreed upon, and shall not be discriminatory. Fort Collins agrees that the faterates from time to time established by the Board of Directors of Platte River shall be deemed to be substituted for the rate herein rates presently contained in the Tariff Schedules and agrees to pay for electric power and energy furnished to it hereunder after the effective date of any revisions to the Tariff Schedules at such revised faterates. Article 3: Covenants of Platte River (a) Platte River shall use reasonable diligence to furnish a constant and uninterrupted supply of electric power and energy hereunder. If the supply of electric power and energy shall fail, or be interrupted, or become defective through uncontrollable forces, as defined herein, Platte River shall not be liable for any claim or damages caused thereby. (b) After first satisfying the electric power and energy requirements of all Municipalities to which it furnishes electric power and energy, as such requifeEnents aF Platte River shallmay, in its sole discretion, market and dispose of, , any anfl all surplus electric power and energy which it owns or produces or which Platte River is obligated by contract to purchase,under the most advantageous terms and conditions obtainable. (`......_..l n......._ /".....a..act Pra A,.:ens ARaehi. ent 12 ..4..,d....J 1....Pto ARd ......ae a art 1...f,..�C Aattp Ri;-Lr.qhqll not be liable therefor er-for- Jamages caused thefeby. (c) Platte River shall consider the environmental impacts of the planning design, construction, and operating decisions associated with the performance of its obligations under this Agreement. Article 4: Covenants of Fort Collins (a) Fort Collins agrees to maintain rates for electric power and energy furnished to its electric utility customers which will, after payment of all of Fort Ee44v,!sCollins' costs of Fort Collins Power Supply Agreement Amended and Restated 02/24/2009 Pape 4 of 11 operation and maintenance (including, without limitation, replacements, insurance, administrative and general overhead expense), return to Fort Collins sufficient revenue to meet its obligations to Platte River hereunder. (b) Fort Collins shall not sell at wholesale any of the electric energy delivered to it hereunder to any of its customers for resale by that customer, unless such resale is specifically approved in writing by Platte River. (c) Fort Collins acknowledges that it is familiar with the provision of Platte River's contract with the United StatesWestem Area Power Administration which requires, as a condition of the purchase of federally generated power pafsuant te stieh centFact, that Aatte Rim-pr FA;%kP ;4A,;;iIA le the benefits theFeef to the Municipalities At fair and _pasenable . rms And at die leivest pessiNe ratesomply with certain provisions of the "General Power Contract Provisions," which is attached hereto as Attachment A. Fort Collins eF-acknowledges its compliance obligations under the General Power Contract Provisions, as that ocument presently exists and as it to implemerAmav be modified in the distFibution -iples of said ^ and , es .^ , sefuture. Article 5: Conditions of Delivery of Power and Energy (a) The electric power and energy to be furnished by Platte River shall be alternating current, sixty (60) hertz, three-phase, subject to conditions of delivery and measurement as hereinafter provided and in the Tariff Schedules. (b) T"-*•^ River'.; '-'=••^_Y and measurealefft ^fResponsibilities for the facilities through which electric power and energy is delivered are set forth in Attachment GBC of this Agreement, attached hereto and made a part hereof as amended by the Pa-rties from time to lime. (c) Fort Collins shall make and pay for all final connections between its system and the system owned by, or available to, Platte River at the points of delivery agreed upon. (d) Unless otherwise agreed, Fort Collins shall install, own, and maintain the necessary substation equipment at the points of delivery from the system of, or available to, Platte River and shall install, own, and maintain switching and protective equipment of Fort Collins Power Supply Agreement Amended and Restated 02/24/2009 Page 5 of 11 adequate design and sufficient capacity beyond such points of delivery to enable Fort Collins to take and use the electric power and energy supplied hereunder without hazard to such system. (e) To provide adequate service to Fort Collins, Platte River agrees to increase the capacity of an existing transmission point of delivery, or to establish a new transmission point of delivery at a mutually agreeable location, of a design capacity of not less than 10,000 kV a maximum nameplate rating at 55'C. rise,and in accordance with this Agreement. (f) Fort Collins shall ,give Platte River at least two years written notice of the need to increase the capacity of an existing transmission point of delivery or the need for a new transmission point of deliverv. If new transmission is required, Fort Collins shall give Platte River at least four vears written notice. The notice shall specify the amount of additional or new capacity, the new transmission required, and the desired initial date of its operation. Platte River shall, within sixty y(60) days after receipt of such notice, and on the basis of the best information available to Platte River from system plans and load projections for Fort Collins, inform Fort Collins in writing of Platte River's plans and schedules with respect to the supply of the additional capacity requested by Fort Collins, and shall thereafter keep Fort Collins informed of Platte River's progress in supplying such additional capacity. Any written notice requesting additional capacity at an existing point of delivery or the establishment of a new Point of delivery shall provide to Platte River any and all authority necessary for its facilities to occupy the property of Fort Collins during the period in which that point of delivery is used by Platte River for the delivery of power and energy. (g) If Fort Collins requires the construction of a 115 kV or 230 kV transmission line for additional service where such line is a tap or radial line over which energy can flow in only one direction, as distinguished from a system line over which energy can flow in either direction, then ownership, operation, and maintenance of such 115 kV or 2,30 kV transmission line will be undertaken by Platte River pursuant to a separate agreement with Fort Collins which provides for an appropriate sharing of the annual costs of ownership and operations of such line for as long as such energy flow and delivery conditions prevail. Article 6: Consultation on System Planning Fort Collins Power Supply Agreement Amended and Restated 02/24/Z009 Page 0 of 11 -7-- (a) At least once each year, on or before July 1, Platte River shall consult Fort Collins concerning its requirements for transmission facilities to effect delivery of power and energy by Platte River. The date for such annual consultation shall be set by agreement of the Parties. (b) At least thirty (30) days prior to the date of such annual consultation, Fort Collins shall provide Platte River with two (2) copies of its latest estimate of requirements for delivery of power and energy covering a future period of ten (10) years. Platte River shall review Fort Collins's annual estimates and shall consider them in preparing Platte River's annual system plan. Following Platte River's annual consultations on delivery requirements with all Municipalities, Platte River shall prepare an annual system plan for the delivery of power and energy to all Municipalities covering a future period of ten (10) years. Decisions regarding the construction of anv transmission and delivery facilities by Platte River primarily to supply For Collins, will take into account Fort Collins' long-range distribution requirements and costs and the long-range costs and benefits of alternative service plans. Platte River's annual system plan shall include appropriate load flow and stability studies and a copy thereof shall be furnished to Fort Collins if requested. Article 7: Measurement of Power and Energy (a) Metering equipment shall be furnished, installed, and maintained by Platte River at each point of delivery to Fort Collins at the low voltage side of the transforming equipment aerated ther-eaEor at such other points as agreed upon by the Parties. (b) Loss adjustments for low voltage side or remote metering shall be as specified in the Tariff Schedule or as otherwise agreed by the Parties. Article 7:8: Meter Readings and Payment of Bills (a) Platte River shall read meters and invoice Fort Collins for power and energy furnished hereunder at approximately monthly intervals. Such invoices shall be due and payable to Platte River within fifteen (15) days from date of issuance and shall become delinquent thereafter. Fort Collins Power Supply Agreement Amended and Restated 02/24/2009 Page 7411 (b) If Fort Callins'sCollins' monthly bill becomes delinquent, late charges at the rate of a one and one-half percent (144V2 %) per month of the unpaid balance shall be added, and if such bill is delinquent for a period of fifteen (15) days or longer, Platte River may discontinue delivery of electric power and energy not less than fifteen (15) days following written notice to Fort Collins. Article 8-.9: Meter Testing and Billing Adjustment (a) Platte River shall test and calibrate meters by comparison with accurate standards at intervals of twelve (12) months, and shall also make special meter tests at any time at Fort 'sCollins' request. The cost of all tests shall be borne by Platte River; provided, however, that if any special meter test made at Fort 6 &ns!sCollins' request shall disclose that the meters are recording accurately, Fort Collins shall reimburse Platte River for the cost of such test. Meters registering within two percent (2%) above or below normal shall be deemed to be accurate. (b) The readings of any meter which are disclosed by test to be inaccurate shall be corrected from the beginning of the monthly billing period immediately preceding the billing period during which the test was made; provided, that no correction shall be made for a longer period than such inaccuracy is determined by Platte River to have existed. If a meter fails to register, the electric power and energy delivered during such period of failure shall, for billing purposes, be estimated by Platte River from the best information available. (c) Platte River shall notify Fort Collins in advance of any meter reading or test so that Fort CAhnssCollins' representative may be present at such meter reading or test. Article 9:10: Right of Occupancy and Access Both Parties shall have a revocable license to occupy the property of the other Party necessary to deliver and receive power and energy under this Agreement as described in Attachment B. Duly authorized representatives of either Party heFete-shall be permitted to enter the premises of the other Party heFet&-at all reasonable times in order to carry out the provisions heFeefof this Agreement and those described in Attachment B. Fort Collins Power Supply Agreement Amended and Restated 02/24/2009 Page 8 of 11 Provisions (ARaEhmeat 9), anti the sef-vice specifications applicable to Faft Collins (Attachfoen the term n n sha]4 mean Pert Gegii-6. T'n'QITCTz Article 11: Uncontrollable Forces Neither Party to this Agreement shall be considered to be in default in performance of any of its obligations, except the agreement to make payment, when a failure of performance shall be due to an uncontrollable force. The term "uncontrollable force' means any cause beyond the control of the Party affected, including but not restricted to, failure of or threat of failure of facilities, flood, earthquake, storm, fire, lighhvng, epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor or material shortage, sabotage, restraint by court order or public authority and action or inaction bv, or failure to obtain the necessary authorization or approvals from, any governmental agency or authority, which by the exercise of due diligence such Party could not reasonably have been expected to avoid and which by exercise of due diligence it shall be unable to overcome. Nothing contained herein shall require a Party to settle any strike or labor dispute in which it may be involved. Either Party rendered unable to fulfill any of its obligations under this Agreement by reason of an uncontrollable force shall give prompt written notice of such fact, if reasonable to do so, to the other Party and shall exercise due diligence to remove such inability with all reasonable dispatch. Article 12: Enforceability The Parties hereto recognize that there are legal constraints imposed upon them by the constitution, statutes, and rules and regulations of the State of Colorado and of the United Mates, and imposed upon them by their respective governing_statutes, charters, ordinances, rules and regulations, and that, subject to such constraints, the Parties intend to carry out the terms and conditions of this Agreement. Notwithstanding any other provision of this Agreement to the contrary, in no event shall either of the Parties exercise any power or take any action which shall be prohibited byapplicable law. Whenever possible, each provision of this Fort Collins Power Supply Agreement Amended and Restated 02/24/2009 Page 9 of 11 Agreement shall be interpreted in such a manner so as to be effective and valid under a]�Rlicable law. Article 13:Term of Agreement JaL_This Agreement shall become effective when executed by both Parties, and shall amend and supersede the existing Contract for the Supply of Electric Power and Energy between Platte River and Fort Collins, dated Mafew Wluly L 1998. This Agreement shall remain in effect until December 31, 2949J and thereafter until terminated by either Party following not less than si*otwelve 12) months written notice to the other Party of its intention to terminate. (b) The Transmission Facilities Agreement between Platte River and Fort Collins dated February 22, 1980,shall be deemed terminated as of the date of this Agreement. Article 42-14: Notices Any formal notice provided for in this Agreement, and the payment of monies due,shall be deemed properly served, given or made, if delivered in person or sent by regular mail to the persons specified below: For Platte River: For Fort Collins: General Manager Utilities General Manager Platte River Power Authority City of Fort Collins 2000 East Horsetooth Road P. O. Box 580 Fort Collins, Colorado 80525 Fort Collins, Colorado 80522 Article 4-3:15: Severability In the event that any of the terms, covenants, or conditions of this Agreement or their application shall be held invalid as to any person or circumstance by any Court having jurisdiction, the remainder of this Agreement and the application of its terms, covenants, or conditions to such persons or circumstances shall not be affected thereby. Fort Collins Power Supply Agreement Amended and Restated 02/24/2009 Page 10 of 11 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed the day and year first above written. "rc s✓r By: General Manager ATTEST: PLATTE RIVER POWER AUTHORITY: Secretary City Clef CITY OF FORT COLLINS: ATTEST: By Mayor City Clerk Fort Collins Power Supply Agreement Amended and Restabed 02/24/2009 Page 11 of 11 EXHIBIT A Effective September 1,2007 _. WESI ERN AREA POWER ADMINISTRATION I APPLICABILITY. GBNERAL POWER CONTRACT PROVISIONS Fie 1 Applicability -.. .. . .. . . . . . . . . . 1 II. DELIVERY OF SERVICE PROVISIONS- 2 Character of Service .. ..—, ._. ... . 1 3 Use of CapacNy,of Energy in Excess afContracl Obligation . 1 4 Continuity ofSesvice... .. . . . . ... . . . . . . 1 _ 5 Multiple Points ofDcllvery.. .. . .. .. ... . . . . . 2 6 Motoring....... ... 7 Existence of Transmission Service Contract . .. . . 3 8 Conditions of Ttanemisslon Service .. ... .. . .... .. . .. .. 3 9. Multiple Points or Delivery Involving Direct and Indirect Deliveries 3 10, Const untion,Operation,and Maintenance ofConhactot's Power System 3.4 III RAPES,BILLING,AND PAYMENT PROVISIONS.. t I Change of Rates ..... . . . .... . . ..... .. . .. .. . . 4 i 2. Minimum Seasonal or Annual Capacity Charge.. .. . . 4 13 billing and Payment .. ,,.,...... .. .... ... 4-5 - 14 Nonpayment of Bills in Full When Due . . ... . . ., 5 15 Adjustments for Fractional Billing Period . . . . . ..5 _ 16. Adjustments for Curtailments to Finn Service . . .. . . 5'.6 IV. POWER SALES PROVISIONS. 17 Rasole of Firm Electric Service(Wholesale Sales for Rosalc) .. . . .... .. 6 18 DisuibufionPrinciptos. . . . 6 19 Conn act Subjocl to Colorado River Compact . . . . 6 V FACILITIES PROVISIONS. 20 Dcsign Approval.... . .... .... . . . - . . . .. 6.7 . 21 Inspection sad Acceprance . .. 7 22 As-Built Drawings. . ... .,. .. . .. . ... . . .. 7 23. Equipment Ownership Markers. . . . . . . . 7 24 Third-Patty Use of Facilities... . . ... .. . . . .. _ ,. 7 i 25 Changes to West=Control Facilities 7.8 26 Modification of Western Facilities . .. . . . . .. 8 i 27 Transmission Rights .. . .. ... .. .. . 8 1 28 Construction and Safety Procedures 8.9 29 Enviromrsettlal Compliance..... ... .. .. . .. ., . . 9 30 Responsibility lot Regulated Materials . .. .. . . 9 i VI OTHER PROVISIONS. } 31 Authori�xd Representatives of the Parties .. . 9 i 32 Etlbct of Section Headings .. . . . . . 10 I 33 Operating Guidelines and Procedures .... . . . to i 34. Uncontrollable Forces . . .. .10 j 35 Liability. . - . . .. ... I0 36 Cooperatfon of Contracting parties . ... . .. . , . 10,11 ' 37 Trvaafer of Interest in the Contract or Change in Prefsranee Status .. 11 38 Choice of Law and Forum . . . . 12 39. Waivers .. . . .. .. ._ 12 40. Notices. . .... . . . .. ,. .. .. .. 12 r 41 Contingent Upon Appropriations and Authoriralion .. . . 12 42 Covenant Against Contingent Fees .. .. 12 43 Contract Work Flours and Safety Standards .. . . 13 44. Equal Opprinunity Employment Ptactices. 13 45. Use of Convict Labor. ........ . 13 *Legal Citation Revised Soptcrmbm 1,2007 i I i i i Effective&-ptember I,2007 WESTERN AREA POWER ADMINISIRATION GENERAL POWER CONTRACT PROVISIONS I APPLICABILITY., 1 Applicability_ 1.1 These General Power Contract Provisions (Provisions) shall be a part of the contract to which they arc attached. In the event these Provisions differ from requirements of the contract,specific terms set forth in the contract shall prevail 1.2 If the Conuactoh hat member utilities which are either directly at indirectly receiving benefits from the contract,then the Cimtractor shall require such members to comply with Provisions 10, 17, 18, 19,29,.10,36,43,44,and 45 of these General Power Contract Provisions II DELIVERY OF SERVICE PROVISIONS. 2. Character of Service. Electric energy supplied or transmitted under the contract will be three-phase, alternating current, at a nominal frequency of sixty(60)hertz(cycles per second). 3 Use of Capacity or Energy in Excess of Contract Ob i atR ion, The Contractor is not cndtled to use Federal power,energy, or capacity in amounts groater than the Western contract delivery obligation In cffeot d'or each type of service provided for in the contract except with the approval of Western Unauthorized overruns of contract delivery obligations shall be subject to charges specified in the contract or the applicable rate sebodulm. Overruns shall not establish any continuing right thereto and the Contractor shall cease any overruns when requested by Western, or in the case of authorized ovetruns, when the approval expires,whichever occurs first. Nothing in the eonmaci shalt obligate Western to increase any delivery obligation. If additional power, energy, or capacity is not available from Western, tire responsibility for securing additional power, energy, or capacity shall rest wholly with the Contractor. 4. Continuitvof Service Electric service will be supplied or transmitted continuously except for: (1)fluctuations, interruptions, or reductions duo W uncontrollable forces, as dunned in Ptpvislon 34 (Unconlrvtlablc Forces) herein, (2) fluctuations, interruptions, or reductions due to operation of devices installed (or power system protection; and (3) temporary fluctuations, interruptions, or reductions, which, in the opinion or the party supplying the service, arc necessary or desirable for the purposes of maintenance, repairs, tuplacements, installation of equipment, of investigation and inspection. The party supplying service, except in case of emergency, will give the party to whom service is being provided masonabio advance notice of such temporary interruptions of reductions and will remove the cause thereof with diligence I 1 j I I I i I Effective Scptcmbw 1,2007 5 Multiple Points of Delivery When electric service is supplied at or transmitted to two or more points of delivery under the same rate schedule, said rate schedule shall apply separately to the service supplied at or transmitted to each point of delivery;JLrovided,That wbete the meter readings nz considered separately, and during abnormal conditions,the Contractor's system Is interconnected between points of delivery such that duplication of metered power is possible, the meter readings at each affected point of delivery will be adjusted to compensate for duplication of power demand recorded by meters at alternate points of delivery due to abnormal conditions which are beyond the Contractor's control or tcmpotary conditions caused by scheduled outages 6 Metering. 61 The total electric power and onoW supplied or Gansmitted under the contract will be measured by metering equipment to be funushed and maintained by Western, a designated representative of Wcs.cm, or where situations deem it appropriate as determined by WvAem, by the Contractor of its agent(s). In the event metering equipment Is furnished and maintained by the Contractor or its agent(s)and the equipment is used for hitting and other accounting purposes by Western,the Contractor shall ensure that the metering equipment complies with applicable metering policies established by Western 62 Meters shall be secured by appropriate security measures and meters shall not be accessed except when the meters are to be inspected,tested,adjusted,or repairvd Representatives of affected parties shall be afforded reasonable opportunity to be present upon such occasions. Metering equipment shall be inspected and tested each year by the party responsible for meter maintenance, unless a different test interval is determined in accordance with good utility practices by an applicable regional metering policy, or as agreed upon by the parties. Meters shall also be tested at any reasonable time upon request by a patty hereto, or by an affected supplemental power supplier, transmission nbront, or control area upstater. Any metering equipment found to be damaged, defbctive,or inaccurate shall be repaired and readjusted or replaced by the party responsible for meter maintenance as soon as practicable. Meters found with security breaches shall be tested for tampering and,if appropriate,meter readings shall be adjusted by Western pursuant to Pmvislon 6 3 below 6.3 Except as otherwise provided in Provision 64 hereof; should any meter that is used by Western for billing or other accounting purposes fail to rogister accurately,the electric power and energy supplied or transmitted during the period of failure to rogistci accurately, shall, fb billing purposes, be estimated by Western firm the best available infurmation 6.4 If inspections and tests of a meter used by Western f'or billing or other accounting purposes disclose an crier cxonetlirtg 2 percent,or a lesser Lange in enor as agreed upon by the parties, then a correction based upon the inaccutacy found shall be made to the service izcoids for the period of inaccuracy as determined by Western. lftho period of inaccuracy cannot be determined, the Inaccuracy shall be assumed to have existed during the errthe monthly billing period irnmedlately preceding the billing period in which the inspection or test was made and the resulting correction shall be made accordingly. 6.5 Any correction in billing or other accounting information that results (horn a correction in meter records shall be made in a subsequent monthly bill rzndered by Westem to the Contrautor. Payment of such bill shall constitute full adjustment of any claim between the parties arising out oflnaccuratcmetering equipment i I 2 i F,ffeetivo September 1,2007 7. Existence of Transmission&ovine Conners. If the contract provides for Western to furnish services using the facilities of a (hind party, the obligation of Western shall be subject to and contingent upon the existence of a transmission service contract granting Western rights to use such facilities. If Western acquires or constructs facilities which would enable it to furnish direct service to the Contractor,Western,at its option,may furnish service over Its own facilities 8 Cgriditinns of Transmission Scrvicc 8.1 When the electric service under the contract is furnished by Western over the fhcilhles of others by virtue of s transmission service arrangement, the power and energy will be furnished at the voltage available and under the conditions which exist fiom time to time on the transmission system over which the service is supplied 82 Unless otherwise provided in the contract or applicable rate schedule, the Contractor shall maintain a pewct factor at each point of delivery firm Wastctn's transmission agent as requited by the transmission agent 83 Western will endeavor to inform the Contractor firm time to time of any changes planned or proposed on the system over which the service is supplied, but the costs of any changes made necessary in the Contractor's system,because of changes or conditions on the system ever which the service is supplied,shall not be a charge against or a liability of Western. 8.4 if the Contractor,because of changes or conditions on the system over which service under the contract is supplied,is required to make changes on its system at its own expense in cider to continue receiving service under the contract, then the Centimeter may terminate service under the contract upon riot loss than sixty (60)days written notice given to Wcstctn prior to matting such changes,but not thereafter. 85 If Western notifies the Contractor'that electric service provided for under the contract cannot be delivered to the Contractor because of an insufficiency of capacity available to Wostem in the facilities of others over which service unde the contract is supplied, then the Contractor may terminate service under the contract upon not less than sixty(60)days written notice given to Western prior to the date on which said capacity eeaaeS to be available to Western,but not thereafter 9, Multiple Points of Delivery rnvolvin>.Direct and Indirect Deliveries. When Western has provided line arid substation capacity under the contract for the purpose of delivering electric service diree:tly to the Contractor at specified direct points of delivery and also has agreed to absorb transmfssion service allowance or discounts for deliveries or energy over other syslcm(s) to indirect points of delivery and the Contractor shifts any of its load served under the contact from direct delivery to indirect delivery,Western will not absorb the transmission service costa on such shifted load until the unused capacity,as ' determined solely by Western,available a(the direct delivery points aflbcted is fully utilized. 10 Construction,Ooeration and Mainterianceof contractor's Power Svstem; The Contractor shall, and, if applicable, shall require each of its members or transmission agents to consuucl, operate,and maintain its power system in a manna'wldeh,as determined by Wes(em,will not interfere with the operation of the system of Western or its transmission agents over which electric services are furnisher)to the Contractor under'the contract, and in a manner which will coordinate with the protective relaying Lind other protective arrangements of the system(s) of Western or Western's hanarnission agents Western may reduce or 3 ; i Gtfecdvc September I,2007 discontinue furnishing services to the Contactot if,after notice by Western,the Contractor fails or refuses to make such changes as may be noccssary to eliminate an unsatisfactory condition on the Contractor's power system which is determined by Western to interfere significantly under current or probable conditions with any service supplied from the power system ef'Wrr9=01 from the power system of a transmission agent of Western Such a reduction or discontinuance of service will not relieve the Contractor of liability for any minimum charges provided for in the contract during tite time said sevices are reduced or discontinued Nothing in this Provision shall be construed to render Western liable in any mars'for any claims,demands,costs, losses,causes of action, damages, of liability of any kind or nature arising out of of resulting from the construction, opetation, 01 maintenance of the Contractor's power systetn III RATES,BILLING,AND PAYMENT PROVISIONS. 1 i Change of Rates. Rates applicable under the contras shall be subject to change by Western in accordance with appropriate rate adjustment p]ocodures. if at anytime the United States ptemulgatcs a rtte changing a talc then in effect under the contract, it will promptly notify the Contractor thereof Rates shall become effective as to the contract as of the effective date of such rate. the Contractor,by written notice to Western within ninety(90)days after the effectivo date of a rate change,may elect to terminate the service billed by Western under the new rate Said termination shall be effective on the Iasi day of the billing period requested by the Contractor not later than two(2)years after the effective date of the new rate. Service provided by Western shall be paid for at the new trite regardless of whether the Contractor exercises the option to terminate service 12 Minimum Seasonal or ,p ua Capacity Charges.When the rate in effect under the contract provides for a minimum seasonal or annual capacity charge,a statement of the minimum capacity charge due,if any, shall be included in the bill randand lot service for the last billing period of the service season or contract you as appropriate, adjusted for increases or decreases in the contract rate of delivery and for We number of billing periods during the yea] or season In which service is not provided Where multiple points of delivery are involved and the contract rate of delivery is stated to be a maximum aggregate rate of delivery lint all points,In determining the minimum seasonal or annual capacity charge due,if any,the monthly capacity chruges at the individual points of delivery shall be added together 13. Culling and Payment 13.1 Western will normally issue bills to the Contractor f'o] services furnished during the preceding month within Icn(10)days after the end of the billing period 132 If Western is unable to issue timely monthly bill(s), Wcstem may elect to tender estimated btil(s). Such estimated bills)shall be subject to the same payment provisions as final biil(s),and any applicable adjustments will be shown on a subsequent monthly bill 13 3 Payments of bills issued by Western are due and payable by the Contractor before the close of business on the twentieth (20th) calondar day after the date of issuance of each bill or the next business tiny thereafter if said day is a Saturday, Sunday, or Federal holiday Hills shall be considered paid when payment is received by Western. Bills will be paid electronically or via the Automated Clearing House method of payment unloss a written request to make payments by mail is submitted by the Contractor and approvod by Western Should Western agree to accept payments by mail, these payments will be accepted as timely and without assessment of the charge provided for In Provision 14(Nonpayment of Bills in Full When Due)if a United Stules 4 Effective September 1,2007 Post Office first class mail postmark Indicates the payment was mailed at least Chico(3)calendar days befare Lite due date 13A The parties agree that net billing piocedutcs will be used for payments duo Western by the Contractor and for payments due the Contractor by Western for Cho safe or exchange of electric power and energy, use of transmission facilities, operation and maintenance of electric facilities, and other services Payments due one party in any month shall be offset against payments due the other party in such month, and Lite resulting net balance shall be paid to the party In whose favor such balance exists. The parties shall exchange such reports and information that either party requbms for billing purposes. Net billing shall not be used for any amounts due which are in dispute 14. Nonpayment of Billsin Full When Due. 14 1 Bills not paid in full by the Contractor by the due date specified in Provision l3(Billing and Paymont)hereof shall bear a charge of five hundredths percent(0 05%) of the principal sum unpaid ror each day payment is delinquent, to be added until Cho amount due is paid in full Western will also assess a fire of twenty- five dollars(.$25 00) fur processing a late payment. Payments received will first be applied to the chages for late payment assessed on the principal and then to payment of the principal 14.2 Western shall have the right,upon not less than fifteen (15)days advance written notice, to discontinue llantislung the services specified in the contact far nonpayment of bills in full when due,and to refuse to resume such services so long as any part of the amount due remains unpaid Such a discontinuance of service will not relieve the Contractor of liability for minicarm charges during the time service is so discontinued ]'he rights reserved to Western herein shall be in addition to all other remedies available to Western eithurby Inv or in equity,for the breach of any of the terms hereof 15 Adi{s n_ is or Fractional 8lllfna Period. The demand or capacity charge and minimum charges shall each be proportionately adjusted when fractional billing periods are applicable under this contract A fractional billing period can occur. 1) at the beginning or end of electric service; 2) at the beginning or end of irrigation pumping service oach year; 3) for u fiactional billing period under-a new rate schedule; or 4) for fractional periods due to withdrawals of electric services. The adjustment will be made based on the ratio of the number of hours that electric service is available ! to the Contractor in such fiactional billing period, to the total number of homy in the billing period involved j rneigy billing shill not be affected by fractional billing periods. 16 Adiustments for Curtailments to Firm Service, 16 1 Billing utljustments will be made if firm electric service is interrupted or reduced because of conditions on the power system of the United States for periods of one(1)hour or longer in duration each Billing adjustments will not be made when such cuttaflmont of electric service is due to a request by the Conti-actor or u discontinuance of elecuic service by Wcaleat pursuant to Provision 14(Nonpayment of Bills In Full Wien Due) Yet purposes of billing adjustments under this Provision,the term power system of the Unitod States shall include transmission facilities used under contract but not owned by the United States i 162 The total number of hours of curtailed firm electric service in any billing period shall be determined by adding: (1)the sum of the number of hours of inteaupted electric service to(2)the product,of each [eduction, of. the number of hours reduced electric service and the pereuntage by which electric service was [educed below the delivery obligation of Western at the time of each said reduction of electric service The demand of capacity chage and applicable minimum charges shall each be proportionately adjusted in the tatio that 5 Uffecdvc September 1,2007 the total number of hours of electric xcrvice determined to have been curtailed bears to the total number of hours in the billing period involved 163 The Contractor shall make written claim within thirty (30) days after receiving the monthly bill, for adjustment on account of any curtailment of film electric service, for periods of one(1) hem of longer in duration each,alleged to have occurred that is not reflected in said bill. Failure to make such written claim,within said thirty-day(30-day)period,shall constitute a waiver of said claim. All curtailments of electric service,which arc due to conditions on the power system of the Unfted States, shall be subject to the terms of this Provision; Provided,That withdrawal of'power and energy under the conuact shall not be consideicd a curtailment ofeloculc service IV. POWER SALES PROVISIONS. 17 Rcsnl�9j tIcm Elwtric Service(Wholesale Sales for Reside). The Contractor shall not $ell any him electric power or energy supplied under the contract to any electric utility customer of the Contractor far resalo by that utility customer, Provided, I'hal the Contractor may sell the electric power and energy supplied under the conuact to its members on condition that said members not sell any of said power and energy to any customer of the member for resale by that custumet 18 Distribution Princinlca. The Contractor agrees that the benefls of litm electric power or energy supplied under the conuact shall be made available to its consumers at rates that are established at the lowest possible level consistent with sound business principles, and that these rates will be established in an open and public manner The Contractor tunher agrees that it will identify the costs affirm electric powin or energy supplied under the contract and power from other sources to its consumcts upon request The Contractor will demonstrate compliance with the milufninnots of this Provision to Western upon request 19. Contract Subject to Colorado River Compact Where the energy sold under the contract is generated from waters of the Colorado River system,the contract is trade upon the express condition and with the express covenant that all rights under the contract shall be subject to and comrulled by the Colorado River Compact approved by Section 13 (a) of the Boulder Canyon Project Act of December 21, 1928, 43 U S C §§ 617a-e, and the parties to the contract shall observe and be subject to and controlled by said Colorado River Compact in the construction,management, and operation of the dams,reservoirs,and powcrplants from wNcb electrical energy is to be furnished by Western to the Contractor under the contract, end in the storage, diversion, delivery,and use of water for the generation of electrical energy to be delivered by Western to the Contractor under the contract. i I i V FACILITIES PROVISIONS, 20 Design Approval. I All facilities,construction,and installation by the Contractor pursuant to the contract shall be subject to the approval of Western Pacilitles intercorurections shall normally conform to Western's current "General Requirenenls Ibr interconnection," in effect upon the signing of the contract document providing lot each interconnection, copies of'which arc available from Western At least ninety(90) days,unless otherwise agreed, G Gffmave September 1,2007 prior to the date the Contractor proposes to commence construction or to incur an obligation to purchase Ncflities to be installed pursuant to the contract,whichever date is the earlier,the Contractor shall submit, for(he approval of Westem,dctalled designs, drawings, and speelfreations of the facilities the Contractor proposes to purchase, construct, and install. The Contractor assumes all risks for construction commenced or obligations to purchase facilities incurred prior to receipt of approval from Western Western review and approval of designs and conshuction work hnno way implies that Western is certifying that the designs meet the Contractor's needs. 21 Inspection and Acceptance. Western shall have the right to inspect the matey lals and work Annlshed by the Contractor,its agents, employees,and subcontractors pursuant to the contract. Such inspections shall be at reasonable times at the work site Any materials or work that Western determines is defective or not in accordance with designs,drawings,and syecifcations,as approved by Western,shall be replaced or modified, as directed by Western,at the sole cxpenso of the Contractor before the new facilities are energized - - 22 s-Buili Drawing. Within a reasonable time, as determined by Western, after the completion of construction and installation of facilities pursuant to the contract, the Conhactor shall submit to Western marked as-built prints of all Western drawings affected by changes made pursuant to the contract and reproducible drawings the Contractor ltas prepared showing facilities of Weston the Contractor's drawings of Woslum facilities shall use drawing title blocks,drawing numbers,and shall be prepared in scoot dance with drafting standards all as approved by Western Western may prepare, revise,or complete said drawings and bill the Contractor if the Contractor fails to provide such drawings to Western within a reasonable time as determined by Western 23. Nquitment Ownership Madcers. 23 1 rho Contractor shall identify all movable equipment and, to the extent agreed upon by the parties, all other salvageable facilities constructed or installed on the United Stales right-of-way or in Western i substations pursuant to the contract which are owned by the Conhactot,by permanently affixing thereto suitable markers clearly identifying the Contractoras the owner of said equipment and facilities 232 If icqucsted by the Contractor, Western shall identify all movable equipment unit, to the extent agreed upon by the parties, all other salvageable facilities constructed or installed on the Contractor's right-of-way or in the Contractor's substations pursuant to the contract which are owned by the United States,by permanently affixing thereto suitable markers clearly identifying the United Staters as the ownet of-said equipment and facilities 24 Ord-Panv Use ofFacilitics. the Contractor shall notify Western of any proposed system aharrsc relating to the facilities governed by the contract or allowing thud-party use of the facilities governed by the contract If Wostern notifies the Contractor that said system change will, as solely determined by Western, adversely affect the operation of Western's system the Continemr shall,at no cost to Western,provide a solution to said adverse effect acceptable to Woshrm t i 25. knees to Westem Cglttrol Facilities. I If at any time during the term of the contract,Western determines that changes or additions to control, relay, or communications facilities are necessary to maintain the reliability ar control of Western's transmission j 7 Emotive September I,2007 system, and said changes or additions are cnlinely, or partially required because of the Contractor's equipment installed under the contract, such changes or additions shall, alter consultation with the Contractor, be made by Western with all costs or a proportionate share of all costs, as determined by Western, to the be paid by the Contractot. Western shall notify the Contractor in writing of the necessary changes or additions and the estimated costs to be paid by the Contracton If the Contractor (ails to pay its share of said estimated costs, Western shall have the right,after giving sixty(60) days' written notice to the Contractor, to temdnate the applicable facility Installation provisions to the contract and require the removal of the Conttacloi's facilities 26, Modificatiottss( ' E1em Facilities. Western reserves the right, at any time,to modify its facilities. Western shall keep the Contractor informed of all planned modifications to Western facilities which Impact the facilities installation pursuant to the contract. Western shall permit the Contractor to change or modify Its facilities, in a manner satisfactory to and at no cost or expense to Western, to retain the facilities intoroonnectimt pmsuant to the contract At the Contractor's option, Western shall cooperate with the Contractor in planning alternate arrangements for service which shall be Implemented al no cost or expense to Western. 'rho Contractor and Western shall modify the contract, as necessary,to conform to the new f'aeilitics arrangements. 27 'Ransmission Rights. If the contract involves an installation which sectionalizes a Western transmission line,the Contractor hereby agrees to provide a transmission path to Western across such sectionalizing facilities at no cost or expense to Western. Said transmission path shall be at least egaal, in trams of capacity and reliability, to the path in the Western transmission lfuc prior to the installation pursuant to the contract 28 ens sleds an¢.,$gdypr c• ur•s i 28 1 Tile Contractor hereby acknowledges that it is aware of the hazards Inherent fit high-voltage electric lines and substations, and hereby assumes full responsibility at all times for the adoption and use of necessary safely measures required to prevent accidental harm to petsorurel engaged in the construction, inspection, testing, operation, maintenance, replacement, or removal activities of the Conunctor pursuant to the contract. The Contractor and the authorized employees,agents,and subcontractors of the Contractor shall comply with all applicable safety laws and building and construction codes, including the provisions of Chapter I of the Power System Operations Manual,entitled Power System Switching Procedure, and the Occupational Safety and Health Administration regulations,Title 29 C F R.§§ 1910 and 1926,as amended or supplemented In addition to the safety program required herein, upon request of the United States, the Contractor shall provide sufficient information to demonstrate that the Contractor's safety program is satisfactory to the United States i 282 The Contractor and Its authorized employees, agents, and subconuactots shall familiarize themselves with the location and character of all the transmission facilities of Western and intemomtcctiona of others relating to the work performed by the Contractor under the contract Prior to smrting any construction, installation,or remuval work, the Contractor shall submit a plan of procedure to Western which shall indicate the sequence and method of porf'orrning the work in a safe manner No work shall be performed by the Contrnctor, its employees,agents,or subcontractors until wdtton authorization to proceed is obtained from Western j I 233 At all times when the Contractor, its employees, agents, or subcontractors art performing activities orany type pursuant to the contract, such activities shall be under supervision of a qualified employee, agent, or subcontractor of the Contractor who shall be authorized to represent the Contractor in all mattets pertaining to the activity being War-med. The Contractor and Wester wilt keep each other informed of the names of their designated representatives at the site i 8 Effective September I,2007 284 Upon completion of its work, the Contractor shall remove from the vicinity of the right-or- way of the United States all buildings,rubbish,used materials,concrete forms,and othct like material belonging to the Contractor or used under the Contractor's direction, and In the event of failure to do so the same may be removed by Western at the expense of the Contractor 285 In the event the Conuactot, its employees, agents,or subcontractors fail to comply with any requirement of this Provision, or Provision 21 (Inspection and Acceptance) horein, Western or all allthOliZed representative may issue an order to stop all or any pat of the work until such time as the Contractor demonstrates compliance with the provision at issue. The Contractor, its omployces, agents, or subcontructors shall make no claim for compensation ordamages resulting from such work stoppage 29 Environmental Com r�ap&S: Facilities installed under the contract by any party shall be constructed, operated, maintained, replaced, transported, and removed subject to compliance with all applicable laws,including but not limited to the National Historic Preservation Art of 1966, 16 U S.0 §§470x-6,the National Environmental Policy Act of 1969, 42 U.S C. §§ 43214347, the Endangered Species Act of 1973, 16 U S.0 §§ 1531-1544, and the Archaeological Resources Protection Act of 1979, 16 U S C §§ 470se 470mm, and the regulations and executive orders Implementing these laws, as they may be amended or supplemented,as well as any other existing or subsequent applicable laws,regulations,and executivc orders 30 Responsibility for Regulated Materials, When either party owns equipment containing regulated rnatedul located on the other party's substation, twitchyad,right-of-way, or other property,the equipment owner shall be responsible fur all activities tclated to regulated materials in such equipment that ere necessary to meet the requirements of the Toxic Substances Conucl Act, 15 U S C. §§ 2601-2692, the Resource Conservation and Recovery Act, 42 U S C §§ 6901.6992k,the Comprehensive Enviromnantal Response,Compensation,and Liability Act of 1980,42 U S C §§ 9601.9675,the oil Pollution Act of 1990,33 U,S.C.§§2702-2761,the Clean Water Act,33 U.S C.§§ 1251.1387, the Safe Drinking Water Act,42 U S C. §§300f J26,and the regulations and executive mdcr s implementing these i laws,as they may be amended or supplemented,and any other existing or subsequent applicable laws,regulations, and executive orders. Each party shall label its equipment containing regulated material in accordance with appropriate laws and mgulatious If the party owning the equipment does not perform activities required under appropriate laws and regulations within the time frame specified therein,the other party may perform or cause to be per formed the required activities uflcr notice to and at the solo expense of the patty owning the equipment I VI OTHER PRO'YISIONS, 31. Authorized Renrescniatives of the Partios. Each party to the contract,by written notice to the other,shall designate the representatives)who is (arc)authorucd kn act in its behalf with respect to those matters contained in the contract which ere the functions and responsibilities of the authorized roprosentutives of the parties. Each patty may change the designation of Its authorized represcntxtive(s)upon oral nutce given to the other,confirmed promptly by written notice. 9 I 1 6frectivo Soptember 1,2001 32 Effect of Section Hoadings. Section beadings or Provision titles appearing in the contract or these General Power Contract Provisions are inserted for convenience only and shall not be construed as interpictathms of text. 33 Operating Guidelines and Prox: arcs. 'I he parties to the contract may agree upon and put into effect from time to time,such uthei written guidolines and procedures as may be required in order to establish the methods of operation of the power system to be followed in the performance of the contract 34 n rollabl.p""„[otp Neither, party to the contract shall be considered to be in default in performance of any of its obligations undov the contract, except to make payment as specified in Provision 13 (Billing and Payment)heroin, when a failure of performance shall be due to an uncontrollable force The term"uncontrollable force"means any cause beyond the control of the party affected, including but not restricted to, failure of or threat of failure of facilities, flood, earthquake, storm, fire, lightning, epidernie, war, riot, civil disturbance or disobedience, labor dispute,labor or material shortage, sabotage, restraint by court order or public authority and action or nonactlon by, or failure to obtain the necessary authorizations or approvals fiom, any governmental agency of authority, which by exercise of due diligence such parry could not reasonably have been expected to avoid and which by exercise of due diligence It shall be unable to overcome Nothing contained herein shall be construed to require a Party to settle any strike or labor dispute in which it maybe involved Other party iendmod unable to fulfill any of Its obligations under the contract by reason of an uncontrollable fora shall give prompt written notice of such fact to the other patty and shall exorcise due diligence to remove such inability with all reasonable dispatch 35 Liability. 351 The Conuactot hereby agrees to indcauilfy and hold harmless the United States, its employees, agents, or contractors from any loss or damage and from any liability on account of personal Injury, death,or property damage,or claims for personal injury,death,or propmty damage of any name whatsoever and by whomsoever made arising out of the Contractors', its employees', agents', or subcontractors' construction, operation,maintenance,or replacement activities under the contract. 35.2 The United States is liable only fox negligence on the part of its officers and employees in accordance with the Federal'Fort Claims Act, 28 U S C §§ 1346(b), 1346(c),2401(b), 2402, 2671, 2672, 2674- 2680,as amended or supplemented 36 Cooneration of Contracting Parties if,in the operation and inaintenanec of'their respective power systems or eleuttieal equipment and Vic uUtization thereof for the purposes of the contract, It becomes nocexsaty by reason of any emergency or extraordinary condition for either party to request the other to furnish personnel,materials, tools,and equipment far the accomplishment thereof,the party so reques-.cd shall cooperate with the other and render such assistance as the party so requested may determine to be available. The party making such request,upon receipt of properly itemized bills from the other party, shall reimbutse the party rendering such assistance fbr all costa properly and reasonably incurred by it in such performance, including administiativo and general cxParraes, such costs to be determined on the basis of current charges or rates used in its own operations by the party rendering assistance. issuance and payment of bills for services provided by Western shall be in accordance with Provlatons 13(Billing 10 BrIectivc September 1,2007 and Payment) and 14 (Nonpayment of.Bills in Full When Due) herein Western shall pay bills issued by the Contractor for services provided as soon as the necessary vouchers can be prepared which shall normally be within twenty(20)days 37 Transfer of Interest in 2nVLgt or Chanae In J1efgBnce Stains. 37 1 No voluntary translbr of Old contract or of the rights ofthe Conttacton undet the conn act shall be made without the prior written approval of the Administrator of Western Any volurawy transfer of the contract or of the rights of the Contractor under the contract made without the prior wt itten approval of the Administrator of western may result in the termination of the contract;Pruvidtd, That the wtittcn approval of the Adminisbator shall not be umcasonably withheld; Provided further,That if the Contractor opetates a project financed In whole or in pint by the Rural Utilities Service,'lhe Contactor may transfer of assign its Interest in the contract to the Rural Utilities Service or any other department or agency of the Federal Qovernment without such prior written approval; !Provided further, Ihat any successor to or assignee of the rights of the Conhactpt,whether by voluntary transfer, judicial sale, foreclosure sale, or otherwise, shall be subject to all the provisions and conditions of the contract to the same extent as though such succossot or assignee were the original Conuactor under the contract; end, Provided further, That the exeeubon of a mortgage of trust deed, or judicial of forecloswe sales nnadc thcrcundor,shall not be deemed voluntaty transfers within the meaning of this Provision 372 The Contractor shall maintain its status as an entity eligible for preference in Western's sale ofFedwal powerpurauanl to Reclamation law,as amended and supplemented 37.3 Western shall give the Contractor written notice of Westem's proposed determination that the Contractor leas violated Provision 3 71 and Western's proposed action in response to the violation 37.4 The Contractot shall have l20 days after teccipl of Western's notice provided under Provision 37 3 to submit a written response to Western The Conbaclor may also make an omt presentation to the Administrator duting this 120-dayperiod 37.5 At any time duting this process, the Contractor and Weston may agree upon corrective action to resolve Wostcm's propused determination that the Contractor is in violation of'Provision 31 l 3 7 6 Within 30 days of receipt of the Contractor's written rcsponseprovided under Prevision 37 4, Western will notify the Contractor in wilting of its final decision 1he Administrator's written notice will include the intended action, the effective data thereof,and the reasons fox taking the intended action Implementation of the Adminisbator's action shall take place no carper than 60 days from the Contractor's receipt of such notice 377 Any successor to Westem shall be subject to all the provisions and uoudilions of the contract to the same extent as though such suc=sot were an anginal signatory to the contract. i 378 Nothing in this Provision shall preclude any right to judicial review available to the Contractor under Fcdoral law I1 i i Hffaetive September 1,2007 38 Choice ofLaw and Forum federal law shall control the obligations and procedures established by this contract and the performance and eni'orcemont thi rM forum for litigation arising from this contract shall exclusively be a Futicral court of the United States,unless the parties ag ve to pursue altenalive dispute resolution. 39. Wnivors. Any waivers at any time by either party to the contract of Its tights with respect to it default or any other matter arising under or in connection with the contract shall not be deemed a waiver with respect to tiny subsequent default or matter. 40. Notices. Any notice, demand, or request specifically required by the contract or Ihcsc Provisions to be in wtiting shall be considered properly given when delivered in poison or sent by postage prepaid registered of oettlfled mail, commercial delivery service, facsimile, electronic,prepaid telegram, or by other moans with prior agreement of the parties, to each party's authorized representative at the principal offices of the party The designation of the person to be notified may be changed at any time by similar notice Where facsimile or electronic means arc utilized for any communication coveted by this Provision, the sending party shall keep a contemporaneous record of such communications and shall verify,receipt by the other,party. 41 Contingent UoonAnorunriatioms and Authorization. 41 1 Where activities provided for in the contract extend beyond the current fiscal year,continued exptzldilurts by lire United States arc contingent upon Congress making the necessary appropriations required fbr i the continued performance of the United States' obligations under the contract In case such appropriation is not made,the Contractor hereby releases the United States from its contractual obligations and from all liability due to Ole failure of Congtess to make such appropriation l i 412 In older, to rocciva and expend funds advanced from the Contractor necessary for the continued perforaumce of'the obligations of the United States under the contract,additional authorization may be required In case such authorization is not received,the Centimeter hereby releases the United States from those contractual obligations and from all liability due to the lack of such authorization I 42 Covenant Al sins[Continlreni pees. I The Contractor warrants that no person or selling agency has been employed or retained to solicit of secure the contract upon an agreement or understanding for a commission, porocntago, brokerage, or,comingem fee, excepting bona fide employees or bona fide established commeruial or selling agencies maintained by the Contractor for the purpose of socuring business. For breach or violation of this warranty, Western shall have the right to annul the contract without liability or In its discretion to deduct from the contract price or cunsidwiltion the full amount of snob commission,percentage,brokerage,or contingent tee i 12 Effective September 1,2007 43. Contract WAlljours and Safety Standards. The contract, to the extent that it is of a character specified in Section 103 of the Contract Work }Iours and Safety Standards Act(Act),4011 S.C. §3701,as amended or supplemented,is subject to the provisions ofthe Act,40 U S.C. §§3701-3708,as amended or supplemented,and to regulations promulgated by the Secretary of Labor pursuant to the Act. 44.. Equal Opportunity Employment practices, Section 202 of Executive Order No 11246, 30 Fed. Reg. 12319 (1965), as amended by Executive Order No. 12086,43 Fed.Reg.46501 (1978),as amended or supplemented,which provides, among othcr things, that the Contractor will not discriminate against any employee or applicant for employment because of race,celor, religion,sox, or national origin, is incorporated herein by tefernnce the same as if the specific language had been wtitten into the contract, except that Indian Tribes and tribal organizations may apply Indian preference to the extent permitted by Federal law. 45, Use of Convict Labor'' The Contractor agrees not to employ any person undergoing sentence of imprisonment is performing the contract except as provided by 18 U S.C. § 3622(c), as amended or supplemented, and Executive Order No, 11755,39 Fed,Reg 779(197.3),as amended or supplemented. I I I i I i i I i i i i 13 Attachment B Ownership,License,and Facilities Cost and Maintenance Responsibility I.Real Property Ownership of Existine and Future Joint Use Substations Background— Fort Collins and Platte River do now or will jointly use all of the below-referenced substations regardless = of ownership in order to provide electric service to Fort Collins custos'riers. Joint use is defined as use by both Platte River and Fort Collins where both entities have transMisston and/or distribution facilities on a particular substation site. The substations under joint use as dds`.crilied in this Appendix are generally referred to as"Joint Use Substations." In each substation owned'by'Eoit Collins,Fort Collins has installed or will install distribution facilities and other Y`assoc' iated cquipinent,and Platte River has installed or will install transmission facilities and other associated equipment necessary to provide electric service to Fort Collins customers. In the Dixon Creek substti'on Fort Collins has installed or will install distribution facilities and other associated equipment i-eitessary to Irovide electric"service to Fort Collins customers. The Overland Trail substation is presently inactive, bgtmay be reactivated: A. On the date of this agreement, Fort Cof6i btvns the real prop..rty that contains the following Joint Use Substations: • Harmony(located near the intersecto i of Har ect of C of Drak R umo'ny,Road and Timberline) • Linden Tech (located near the inters ion ollege Venue and 'Linden Center Drive) • Drake(locateducar the mtei6Ction e oa l and College Avenue) • Richard Lake (located west ofAnheuser Bs11 ch facility) • Overland Trail (located near the tgtersection of Overland Trail and Mulberry) r)n• Timbee4ark(located near the mfeiSection of.Timber]ine Road and Prospect Road) • P iiti r(located'near the intersection of College Avenue and Trilby Road) These substafions as well as any future Joint Use Substations located on real property owned by Fort Collins will be referred to hereafter as"Fort Collins Sites." B. On the date of this agreement, Platte River owns the real property that contains the Dixon Creek Joint Use Substation which is located near the intersection of Overland Trail and Drake Road. This substation as well as any future Joint Use Substation located on real property owned by Platte River will be referred to hereafter as"Platte River Sites." C. If service expansions or changes in system configuration require the development of one or more Joint Use Substation locations or the elimination of any existing Joint Use Substation locations,the terms and conditions of such expansion or elimination of a Joint Use Substation as agreed to by the parties must be documented in a written addendum to this Agreement. 1 II. Licensed Facilities. A. In the Transmission Facilities Agreement dated February 22, 1980,Fort Collins gave Platte River license to enter and utilize multiple transmission and substation facilities. That agreement is terminated pursuant to Article 12(b)as of the date of the Amended Contract for the Supply of Electric Power and Energy. In lieu of the Transmission Facilities Agreement,at each Joint Use Substation the owner of the real property licenses the property necessary for the placement of the fixtures necessary to provide service to Fort Collins,referred to herein as"Licensed Facilities",as well as all necessary rights of access,subject to the terms of any easements encumbering said property,through the term of this Agreement unless such fixture is permanently removed from service or replaced prior to termination. The party that does not own the real property in a given substation shall have the right to use the Licensed Facilities in whatever manner the parties shall determine to be the most effective to,mpetits obligations under this Agreement and the local needs of Fort Collins and to make whatever modifications,,improvements, repairs and replacements the parties shall determine to be necessaryto,provide reliableservice. Neither party shall permit any lien or encumbrance to attach to the Licensed Facilities and the1icensed party shall vacate the Licensed Facilities as soon as reasonably possible:at he termination of this Agreement. If any arrangements different from those set forth herein are required for any Joint Use Substation, the special requirements will be documented in an addendum to this Agreement,. B. In addition to the license for use of the Joint Use Substations,1:ort Collins hereby licenses Platte River the following transmission facilities, also referred'to as"Licensed Facilities",owned by Fort Collins through the term of this Agreement unless such transmission facility is permanently removed from service or replaced prior to termination:. 1. 115kv transmission line that runs from'Dixon Creek Substation to Drake Substation. 2. 115kv transmission line that runs from Timberline Park Substation to Drake Substation. Platte Riyer'shill make'uvlratever modificationsjmprovenaents,repairs and replacements it shall deem necessity to these Licensed Facilities`described in Section II.B. in order to provide reliable service to Fort Collins.' `. C. Any written,uotice from Fort Collins to Platte River requesting additional capacity at an existing point of delivery or the establishment of a new point of delivery shall be license to Platte River for its facilities to occupy the real property of Fort Collins in a Joint Use Substation during the period in which that point of delivery is used by Platte.River foi the delivery of power and energy. Also, the facilities contained in a new Joint Use Substation ,Jill be Licensed Facilities in the manner described in and consistent with the terms of this Appendix B. M. Substation Cost and Maintenance Responsibility. The following describes the substation cost and maintenance responsibilities for Fort Collins and Platte River in Joint Use Substations. The following description of the parties' responsibilities will also apply to any future substations that may be constructed by Fort Collins and become Joint Use Substations. If arrangements different from those set forth herein are required for any Joint Use Substation, the special requirements will be documented in an addendum to this Agreement and attached hereto. 2 The real property owner of a particular Joint Use Substation site will install,maintain,and be responsible for the following: • The substation site with sufficient space for both the Fort Collins and Platte River equipment • Grading and surfacing within the fenced area • Access right-of-way and roads • Perimeter substation fence • Landscaping and maintenance of any areas outside the fenced area • Substation yard lighting 3 • Substation yard below grade grounding system I Fort Collins will furnish own, and maintain at its,expense the folio.wing items in any Joint Use Substation: • The 230 or 115kV/13.8kV transforniers,.switchgear,feeder circuits; ,associated foundations and oil containment structures, duct banks,conduits, and all cabling,relays, SCADA,and controls required to operate`such distribution equipment • All foundations required fort.... rt Collins equipment listed above • The Fort Collins switchgearlcontrq'I puilding • The DC power supply systemaand aas"ocia`_tq _equipment for 15KV distribution facilities • Substation,site primary electrI ervice excluding PRPA service entrance equipment 1 • One half tie cost ofany elaetronie`substauon se'cu ity deemed by both parties to be appropriate for the location of the substation Platte,Over will fumNi own,and maintain at its expense the following items in any Joint Use Substation. • All transmission equipment required at the appropriate voltage class to deliver electric ,capacity and energy to foil Collins's facilities including the transmission line transition structures, breakers, switclies 'bus system, relays, meters and associated controls required to'operate such transmission equipment • All foundations required for the Platte River equipment listed above • The Platte River'control building • The DC power supply system and associated equipment for 115/203KV transmission facilities • PRPA control building service entrance equipment • Communication connections for use by both Fort Collins and Platte River • A remote terminal unit(RTU), for shared use to transmit substation information to both Fort Collins and Platte River when required • One half the cost of any electronic substation security deemed by both parties to be appropriate for the location of the substation • Weed control 3 ATTACHMENT 3 r TRANSMISSION FACILITIES AGREEMENT 1 This Agreement, made this 22nd day of February 1980, by and 2 between PLATTE RIVER POWER AUTHORITY, a political subdivision of the 3 State of Colorado (hereinafter called "Platte River") and THE CITY OF 4 FORT COLLINS, a municipal corporation of the State of Colorado (herein- 5 after called "Fort Collins"). 6 WITNESSETH: 7 WHEREAS, Platte River and Fort Collins are parties to a contract 8 dated September 5, 1974, pursuant to which Platte River is obligated to ." . R . sell and deliver.• to Fort. Col-fins•,, and Fort Collins. is obligated to pur- 10' chase arid"receive from Platte River, all electric. power and energy which I11 • Fort Collins shall require for the operation of its municipal electric 12 system (hereinafter called "Power Contract") on the terms and conditions p 13 set forth in said Power Contract; and 14 WHEREAS, Fort Collins .owns.certain! 115 kV :transmiss:ion:fad.1;iti,es�,4n&'... . 15, for consideratioh, 'i:t proposes to`-grant`"aredocable Ticense to Platte 16 . River for-the- purpose of operating, maintaining,_ repairirtg,..and replacing 17 ' said facilities far` the benefit of Fort Collins .and other. constituent 18 • municipal=i•ties-("Munici pal i ties") supplied by" P:lat'te'River" in.'the-interests.. 19 of econb*., rel•tability and coordinated operation thereof; and . 20 WHEREAS; Platte River and Fort Collins. desire'to continue to coop- 21 erate, i'n long-:term arrangements for the planning of future 115 kV 22 electric transrt$s.ion facilities, necessary for coordinated system i 23 „opgratiion.s as well as the dei'ime7ry"of power and energy to Fort Collins. " 24 • and other Municipalities, supplied by. Platte River; 25 : NOW; THEK.tt&'E,�in, consideration of the mutual uridirtAings herein 26 contained, arrd contained in the:Power Contract, the parties hereto. agree i -2- 1 as follows: 2 (1) Revocable License to Operate/Maintain 115 kV Facilities 3 (a) Fort Collins does hereby grant unto Platte River a revocable 4 license to operate and maintain the electric transmission facilities 5 more particularly described in Exhibit "A", attached hereto and 6 incorporated herein ("Licensed Facilities"') for the sum of One 7 Dollar ($1.00), payable in advance, and receipt of which is hereby 8 acknowledged by Fort Collins. Said license shall run from the 1st 9 day of March, 1980 through the 30th day of June, 2014, and there- 10 after unless and until sooner revoked or terminated pursuant to . ... ... . .. .. .1.1. .. :,. . ..Art`icTe 9. , .. 12 (b') During the term'of this Agreement,' Platte River shall have the 13 right to use the Licensed Facilities in whatever manner it shall 14 determine to be the most effective to meet its obligations under ` 15 the Power Contract and the local needs of Fort Collins and 16 to make whatever modifications,. improvements, repairs and replace- 17 ments:.of`ffe Licensed Facilities it shah determine to be necessary; ` 18 PROVIDED, HOWEVER, that it shall preserve the asset value of the 19 Licensed. Facilities less ordinary depreciation. Platte River shall 20 not permit any lien or encumbrance to ,attach to the Licensed Facil- 21 ities and shall deliver them up to Fort Collins: at the termination 22 of this Agreement. 23 (c) Platte River shall be responsible for the completion, operation, .24 maintenance, repair; replacement and any modification of the 25, Licensed Facilities. All costs incurred by Platte River relating 26 to the Licensed Fa:cfTities shall be, borne by. Platte River, and can- 23 -stitute a•component'of Platte River's wholesale rate under the I r`v>Ta: 28 Power Contract. General expenses relating to the Licensed -3- 1 Facilities shall be included therein. 2 3 (2) Point of Transfer Between Fort Collins and Platte River 4 For the Licensed Facilities and for the 115 kV and 230 kV delivery 5 facilities pursuant hereto, the point of transfer of control and 6 responsibility between Platte River and Fort Collins at each sub- 7 station shall be the load side of the high ,voltage disconnect switch 8 between the 115 kV or 230 kV bus and Fort Collins' distribution 9 transformer at such substation. Platte River shall control said 10 disconnect switch by license or- ownership, as the case may be. 11 Nothing in this Agreement shall preclude Fort Collins from discon- 12 necting its facilities from, and reconnecting them to, Platte 13 River's system at any such substation provided it has first 14 received proper operating and safety clearances in accordance 15 with the June 1979 Operating Agreement attached as Exhibit "B", 16 plus any approved amendments thereto. 17 18 (3) Responsibility for Present and Future 115 kV Transmission Facilities 19 (a) From and after March 1, 19809 Platte River will operate, maintain, 20 renew and replace all existing 115 kV transmission and delivery facil- 21 ities described in Exhibit "A". 22 (b) From and after March 1, 1980,. Platte River will assume respons- 23 ibility for any and all 115 kV and 230 kV transmission and detivery 24 facilities which are under construction by Fort Collins and shall 25 reimburse Fort Collins for its moneys expended thereon, and will 26 construct, own, operate, maintain, renew and replace all such facil- i 27 ities and all additional 115 kV and 230 kV transmission and delivery i 28 facilities which become necessary to supply Fort Collins, in accordance i i • I f -4- 1 with the conditions hereinafter set forth; provided, however, that if 2 for any reason Platte River is precluded from providing, at 115 kV or 3 230 kV, additional transmission and delivery facilities pursuant to 4 paragraph (b) or (d) of this article, Platte River shall provide 5 equivalent transmission and delivery facilities at a lower voltage, 6 which are of sufficient capacity, reliability and economically prac- 7 ticable in the circumstances, to supply Fort Collins' power and energy 8 requirements. 9 (c) To provide adequate service to Fort Collins, Platte River agrees 10 to increase the capacity of an existing point of delivery, or to 11 establ'ish a new point of delivery at a mutual.ly agreeable location, of 12 a design capacity of not less than 10,000 kVa maximum nameplate rating 13 at 550 C. rise, and in accordance with this Agreement. 14 Fort Collins shall give Platte River at least two years written 15 notice thereof and shall specify the amount of additional or new 16 capacity and the desired initial date of its operation. Platte 17 River shall , within sixty (60) days after receipt of such notice, 18 and on the basis of the best information available to Platte River 19 from system plans and load projections for Fort Collins, inform 20 Fort Collins in writing of Platte River's plans and schedules with 21 respect to the supply of the additional capacity requested .by Fort 22 Collins, and shall thereafter keep Fort Collins informed •of Platte 23 River's progress in supplying such additional capacity. 24 (d) If Fort Collins requires the construction of a 115 kV or 230 kV 25 transmission line for additional service commencing March 1, 1980, 26 or later where such line is a tap or radial line over which energy 27 can flow in only one direction, as distinguished from a system line f . i 28 over which energy can flow ,in either direction, then ownership, i -5- 1 operation and maintenance of such 115 kV or 230 kV transmission line 2 will be undertaken by Platte River pursuant to a separate agreement 3 with Fort Collins which provides for an appropriate sharing of the 4 annual costs of ownership and operation of such line for as long as 5 such energy flow and delivery conditions prevail. 6 7 (4) Consultation on System Planning 8 (a) At least once a year, on or before July 1, Platte River shall 9 consult Fort Collins concerning its requirements for transmission 10 facilities to effect delivery of power and energy by Platte River. 11 The date for such annual consultation shall be set by agreement of 12 the Parties. 13 (b) At least thirty (30) days prior to the date of such annual 14 consultation, Fort Collins shall provide Platte River with two (2) 1 15 copies of its latest estimate of requirements for delivery to it 16 of power and energy covering a future period over which Fort Collins' 17 maximum system 30-minute kilowatt demand is expected to reach a level 18 of twice its latest system maximum demand, or 10 years, whichever is 19 greater. Platte River shall review Fort Collins' annual estimates 20 and shall consider then in preparing Platte River's annual system 21 plan. Any differences between Fort Collins' estimates of its require- 22 ments and those used by Platte River in its annual system plan shall 2V be explained in writing and a copy shall be furnished to Fort Collins. 24 (c) Following Platte River's annual consultations on delivery re- 25 quirements with all Municipalities, Platte River shall prepare an 26 annual system plan for the delivery of power and energy to all Muni- 1 27 cipalities covering a future period over which Platte River's maximum jJ 28 system demand Is expected to reach a level of twice its latest system i r i -6- 1 demand, or 10 years, whichever is greater. Decisions regarding the 2 construction of any transmission and delivery facilities to be under- 3 taken after March 1, 1980, which are to be provided by Platte River 4 primarily to supply Fort Collins, will take into account Fort Collins ' 5 long-range distribution requirements and costs, and the long-range 6 costs and benefits of alternative service plans, in determining the 7 plan for 115 kV or 230 kV supply to Fort .Collins. Platte River's 8 annual system plan shall include appropriate load flow and stability 9 studies and a copy thereof shall be furnished to each Municipality. 10 11 (5) Construction of Future Transmission and Delivery Facilities 12 From and after March 1, 1980, Platte River shall finance, construct, 13 own, operate and maintain all future transmission and delivery facil- 14 ities required to supply electric power and energy to Fort Collins at (1 . 15 existing delivery points or at future delivery points as may be estab- 16 lished from time to time by agreement between Platte River and Fort 17 Collins. 18 19 (6) Transmission and Delivery for Other Utilities 20 The transmission facilities of Fort Collins which are transferred to 21 Platte River pursuant to this Agreement are intended for use primarily 22 to facilitate the transmission and delivery of electric energy to Fort- 23 Collins and other Municipalities 'served by Platte River. Any-use that 24 Platte River shall make of such transmission facilities to effect the 25 delivery of energy to, or the receipt of energy. from, other electric 26 utilities shall be (i) under such terms and conditions that do not 27 impair service to Fort Collins and (ii) compensatory to Platte 28 River. s -7- 1 (7) Sales by Platte River to Other Entities j 2 Platte River covenants that it will not make sales of energy directly 3 to non-utility consumers situated within the electric distribution 4 service area of Fort Collins unless requested to do so by Fort 5 Collins, pursuant to a written agreement among Platte River, Fort 6 Collins and any such consumer. This covenant shall not affect Platte 7 River's rights and obligations to sell or exchange power and energy 8 to other electric utilities pursuant to its contracts with such 9 utilities and under conditions consistent with the provisions of 10 Section 3(a) of the Power Contract. .11 12 (8) Right of Access 13 Duly authorized representatives of either party hereto shall be 14 permitted to enter the premises of the other party hereto at all 15 reasonable times in order to carry out the provisions hereof. 16 17 (9) Termination 18 The license granted herein shall become effective March 1, 1980 and 19 shall remain in effect until June 30, 2014, unless revoked or term- 20 inated by either Party, following not less than three (3) years 21 written notice to the other Party given prior to June 30, 2014, or 22 unless terminated thereafter following not less than six (6) months' 23 written notice by one Party to the other. 24 25 (10) Notices 26 Any formal notice provided for in this Agreement, and the payment of j 27 moneys due, shall be deemed properly served, given or made, if deli- 28 vered in person-or sent by regular mail to the persons specified below: E -8- 1 For Platte River: For Fort Collins: 2 General Manager Director of Light and Power Platte River Power Authority City of Fort Collins 3 Timberline & Horsetooth Roads P. 0. Box 580 Fort Collins, Colorado 80525 Fort Collins, Colorado 80522 4 5 (11) Liability 6 (a) Platte River hereby agrees to indemnify and hold harmless Fort 7 Collins, its agents and employees, from any loss or damage and from 8 any liability on account of personal injury, death or property damage, 9 or claims for personal injury, death, or property damage of any nature 10 whatsoever and by whomsoever made arising out of or in any manner 11 connected with the activities of Platte River hereunder. 12 (b) Fort Collins hereby agrees to indemnify and hold harmless Platte 13 River, its agents and employees, from any loss or damage and from any 14 liability on account of personal injury, death or property damage, or _ 15 claims for personal injury, death or property damage, of or any nature 16 whatsoever and by whomsoever made arising out of or in any manner 17 connected with the activities of Fort Collins hereunder. 18 19 (12) Disputes 20 Any matter of disagreement between the Parties to this Agreement shall 21 be referred promptly to the Platte River Board of Directors for 22 arbitration. 23 24 (13) Severability 25 in the event that any of the terms, covenants, or conditions of this 26 Agreement or their application, shall be held invalid as to any person i •27 or circumstance by any court having jurisdiction, the remainder of 28 this Agreement and the application of its terms., covenants or _9_ 1 conditions to such persons or circumstances shall not be affected �'- 2 thereby. 3 4 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to 5 be executed the day and year first hereinabove written. 6 7 PLATTE VE POWE AUTHORI Attest: By: 9 Assistant secretary General Manager 1.0 Attest: CITY OF FORT CO 11 0�(l�ta 12 City C er By. 7 13 A pro tAttorn6y� to F rm: 1 C ty 16 17 18 19 20 21 22 23 - 24 25 26 i 27 28 1 The land and land rights licensed at Timberline Park Substation shall be that r' enclosed by and shall include the existing substation fence, as shown on the attached diagram. Said fence shall not be moved or expanded, and no permanent facilities shall be constructed in the cross-hatched area shown on the diagram as reserved for Fort Collins' future distribution facilities, without the per- mission of the City of Fort Collins, which permission shal'1 not be unreasonabl withheld. Maintenance of the grounds outside the substation fence and main- y tenance of the, access road to the substation shall remain the reponsibility of the City of Fort Collins. Platte River agrees that (i) it will not construct or permit construction of any circuits under 115 •kV to exit Timberline Park Substation overhead, (ii) it will not construct, or permit -construction.of.any. 13 kV class circul.ts to exit said substation•exEept to supply 'eiectric`-T.oads of Fdrt:Collins or Pla'tte 'River, and (iii) it Will provide at least two.'year's notice of any expansion that would impact nursery -stock in locations presently utilized for this purpose. The following .tattle shows .the .cost and.',•malntenance- responsibil i.ties agreed to .by the Parties FURNISN . MAINTAIN. Substation. A '8 'C' D. 'E F`"'--G� -H .I IN. J B. C D E F T H I J Overland Trail C C C C C C C C C C C C C C C C C C C Drake C C C C C C C C C C C C C C C C C C C Timber.l.ine C C C C C C C C C C PR C PR C PR PR PR .PR' PR 1 3 ' Legend: C -.City of Fort Col.l.ihs PR Platte River Furetsh And* intain.:htems (A)'Site Purchase and; Ownership (F) Control Building '(sj sr ading.and:BurYacing,:w.f th.fn (G);:Ba€,very-& DC System: :.:.F.ericed Ar.ea (C)•'Access adoad -;Sta.tion Service (D); Felice (I); Stati-on.lighting, (E}' Landscaping and Grounds WY Station GroundingOuts.ide:Ferie6a. Area The toregofng:£xhtti4t is:appravLad by the parties-.as of cta ber 17 i984 PLATTE RI1fER POWER AUTHORITY CITY -OF FORT COLLINS, L ATTEST: t/" ,, ATT: ATTACHMENT' TO EXHIBIT A " FENCE AREA OF TIMBERLINE PARK SUBSTATION: U SCALE I'. = loop ) NORTH 660. ^Cross-Notched areo reserved tbr Ci'•.ty of Fort Collins dal I buff,d !aqulpment:. 450 Exhibit ''A"- The foIIowing,properti es. comprise the Licensed FaciIitfes to be operated and maintained by PTatte',River• Power.Authority from and after March 1, 1980. pursuant; to the.provtsions of Article (1) (a) of the Transmission Faci.lities' Agreement to which this. exhibit is annexed. Category Property: Descriptaon FERC Account (1) Land and',.Land.:R2hfss '3501 A111and, landrights- and easements on which the folaowing facilities are: erected: (a) Poudre Tap°,to Power Plant Sub- statiion 115 kV lane (t!) WAPA,Ltne'to Drake:5ubstation .. ... ......•.:.: :..... :... ..: ;:.. . 11.5:kV •l;tne; . _ (c),. Timber)ing.;:Park;Substation (Statton','300)•, RY Station•..E of merit I 353 All -foundatichs, control buildings, and structueal- steel; 115 kV circutt- breakers', buses:, switches and insulators, 115~kV'control •e u! 4 pmeiit and:'devices', 0-C } upply-q fences,, general• station ;equipment, switchboards, meters, relays, wtring and _ other electr�iCal`,facili'ties in `service at:• -. Tiinbsrltie Park Substaifon;?(Station -°300) (3) Statlon•i: ut aril II • 362 _ . 1 c. roa ers, buses, switches, -` inSUla O-9 control e4utpment;6 devices,' swf,tchbaards, meterscelays, structura;l steel and'-fouridattons _i_n serpfce at ; (a); Drake Roadl,Sub (Statton200) and; Overland T.raf 1 Sub•,(Station 400)' {c).• Power Plant:,Sub,..(Statl;on:100) ;. (4)' Pdl'es and:Fixtures .115;kY. .Li es 355 ='anc ors, ea , arm an o •er guyS; ihcluding:`guy guards, guy clgws, poke:, plates, etc; brackets, cross arms. and DraCe`s, gaining, -roofing,, stenciling: and=tag91n9; lnsulator•pins and-suspens:fon bal:ts; pbl:e steps:; Pal®s*. wood:;b sleet; .. . • raci:s cort�plete. tri;th iasuiators; reinforcing; ' and;<stubbfng; settings, shaving° and paint:- . i for. rig°; the fa,Tlowtng factlittes (a) Poudre Tap to Power:Plant;Sub (b) WAPA a ne to:Drake .:Substation (c) Drake::Sub ,,to :Platte`Riue� 230: kV Line' (d): 13s 'kV 'on double; ;circuit south of -.Station_300. Category Property Description FERC Account (5) All conductor, ground wires and ground 356 clamps, insulators, switches and other devices for the following facilities: (a) Poudre Tap to Power Plant Sub (b) MAPA Line to Drake Sub (c) Drake Sub to Platte River 230 U Line (d) Double circuit south of Station 300 ATTXCHMENT 4 Utilities F6rt City ofelectric o d Streeater•wastewater•water Collins For Wood Street PO Box 560 970.Collins,0 80522 970.221.6700 970221.6619-fax 970.224.6003-Too Ut1li6es®fcgov.com fcgov.com/ufililles TO: Mayor Hutchinson and City Councilmembers THROUGH: Darin Atteberry, City Manager t� FROM: Brian Janonis, Utilities Executive Director Steve Catanach, Light and Power Manager 4 CC: Patty Bigner, Utilities Customer and Employee Relations Manager Jenny Lopez Filkins, Assistant City Attorney Brian Moeck, General Manager, Platte River Power Authority ("Platte River") Joe Wilson, General Counsel, Platte River John Bleem, Division Manager, Customer and Environmental Services, Platte River Mike Dahl, Division Manager, Electric Operations, Platte River DATE: October 29, 2008 SUBJECT: October 28, 2008 Work Session Summary— PRPA Organic Contract and Energy and Power Supply Agreement. During the August 19th Council meeting, the Amended and Restated Organic Contract(the "Organic Contract") and Amended Contract for the Supply of Electric Power and Energy(the "Energy Supply Contract") were removed from the agenda in order to discuss the items at a scheduled work session. On October 28, 2008 City Council held a work session to review, discuss and provide direction to staff. Kev Discussion Points Brian Moeck, Platte River's General Manager, presented a brief history of the partnership between Fort Collins, Longmont, Loveland and Estes Park in the establishment of Platte River. The basic function and governance model of Platte River were also discussed. The initial discussion clarified that the proposed change to the Electric Article of the Code addressing the City's electrical service territory and the ability of another entity to make retail electric sales within the City's service area was not at issue in the evening's discussion. It was communicated that Staff has made significant changes to the proposed Code change and would be presenting those to the Electric Board in November and then bringing the proposed language to Council. The process for establishing a buy/sell arrangement to facilitate third party retail sales of energy generated with renewable resources will be handled through an Inter- Governmental Agreement (IGA) between the City and Platte River. A draft of the IGA will be presented to Council along with the proposed code change. I I Chy of F6rt Collins 11'�� The next item of discussion was the amended Energy Supply Contract which contains new language that allows the City to develop and own generation to serve its own electric energy demands. The previous Energy Supply Contract limited the City's ability to self generate to zero. The revised contract proposes a limit of one percent of peak, which amounts to approximately 3,000 kW of generation (about 60% of the load for all city facilities). Council expressed concern over the I%cap and asked why it couldn't be 2%, 3% or even greater_ Joe Wilson, Platte Rivers' General Counsel, provided a detailed explanation. Previous bonds sold by Platte River were sold with a commitment to the buyers that Platte River would be the sole provider to the four cities. Platter River has been aware of the cities desire to support, provide, and develop renewable resources. Discussions with Platte River's Bond Counsel resulted in an agreement that the I% cap could be considered de minimis_ To address Council concern about the 1% limit Platte River explained that should any one of the cities reach the 1%cap prior to the renegotiation of the Contract in ten years, the issue of accommodating additional municipal generation would be discussed. At that time Platte River would approach their Bond Counsel for an expansion of the limit. Council also commented on a document Brian Moeck handed out before the meeting detailing Platte River's commitment to environmental concerns and stewardship. Council complimented Platte River on their efforts, and asked if language could be added to the "whereas"clauses and the "purpose" section of the Organic Contract reflecting that in addition to providing cost- effective service, they will also reflect Platte Rivers' commitment to environmental Stewardship. Initially Brian Moeck expressed hesitancy to add new language to the Organic Contract because it had been approved in its current form by two other member municipalities but after consultation with Joe Wilson, Mr. Moeck indicated that modifications that are not viewed as substantial can be made to the Organic Contract without having to seek approval from the two other members and that even if the modifications are viewed as substantial, Platte River would seek approval of the revised agreement with the other member municipalities. Next Steps 1. Provide a list of the specific projects designated for the $120M in bonds Platte River is pursuing. 2. Provide a brief summary of the Windy Gap project. 3. Revise Organic Contract to include language clarifying Platte River's commitment to sustainability and environmental stewardship, and addressing re-negotiation of the I% cap should the limit be reached prior to the next scheduled contract revision. 4. Provide a graph detailing Platte River's debt since 1973 along with the revenues collected by Platte River from each of the member Cities. 5. Return the revised Organic and Energy Supply Contracts to Council for consideration at the December 2, 2008 regular meeting, including red line copies. Bring the proposed Code Change along with a draft inter-governmental agreement for establishing a buy/sell arrangement between a third party retail electric seller, the City and Platte River to Council. ATTACHMENT 5 Utilities City O� electric - stormwater - wastewater water F6rt I 700 Wood Street COsFo Box 580 Fort Collins, CO 80522 970,221 ,6700 970.221 .6619 - fax 970.224 .6003 - TDD utilities@fcgov. com fcgov. com/utilities DATE : November 4, 2008 TO : Mayor and City Council Members THROUGH : Darin Atteberry, City Manager FROM : Brian Janonis, Utilities Executive Director Steve Catanach, Light & Power Manager RE : Information requested at October 28th work session At the October 28th work session Council requested several items of information from Platte River Power Authority. The items requested were : 1 . A list of the specific projects designated for the $ 120M in bonds Platte River is pursuing in 2009 2 . A brief summary of the Windy Gap project. 3 . A graph detailing Platte River' s debt since 1973 along with the revenues collected by Platte River from each of the member Cities and Platte River' s operating revenues . Platte Rivers ' responses follow. Projects Designated for $120M Bond Issue The Transmission Projects consists of the following projects for expansion and upgrades to Platte River' s transmission system. The largest project involves the installation of a new 230kV transmission line from Xcel ' s Fort St. Vrain Power Plant switchyard to a new substation in the City of Longmont. The new line will be both overhead and underground. Another major element of the project is rebuilding and upgrading the capacity of the existing : Longs Peak-Meadow 115kV line, the Meadow-NW 115kVline and the NW-Fordham Tap Western Area Power Administration 115kV line. This project will improve the reliability of the Longmont transmission system and provide improved capacity for current electric loads and will support future load growth that may occur in the City of Longmont. The total cost of the project is estimated to be $59, 100,000 . To support the termination of the Fort St. Vrain-Fordham 230kV transmission line at the Fort St. Vrain Power Plant Switchyard, Platte River will reimburse Xcel Energy for the installation of a new circuit breaker and associated equipment. This project is necessary to complete the electrical connection to the transmission line. The total cost of the project is estimated to be $ 1 ,000,000 . ATTACHMENT 5 ,.Fort Collins As part of the 230kV transmission project in Longmont the City ' s Fordham Substation will be expanded to include new 230kV breakers, two new 230kV/ 115kV transformers, and a new capacitor bank. The total cost of the project is estimated to be $ 8 ,000,000 , Platte River' s Dixon Creek-Horseshoe 230kV transmission project involves the installation of a new 230kV transmission circuit from Platte River' s Dixon Creek Substation in Fort Collins to the City of Loveland ' s Horseshoe Substation. Platte River will rebuild a four mile segment of Western Area Power Administration ' s 115kV line in southwest Fort Collins for double circuit operation and will rebuild a three mile segment of an overhead line owned by Tri- State for double circuit use. The final portion of the project is a 2 '/2 mile section of 230kV underground line that connects to the Horseshoe Substation. The total cost of the project is estimated to be $ 16, 100,000 . Platte River' s expansion of the Horseshoe Substation will connect the new 230kV transmission line into the Loveland 115kV transmission loop to enhance reliability and provide adequate capacity for future load growth. The Horseshoe Substation will be upgraded with two 230/ 115kV transformers, associated circuit breakers bus and control equipment, and the addition of a 115kV capacitor bank to support adequate voltage in the City of Loveland during summer peak periods. The total cost of the project is estimated to be $ 10,300,000 . Platte River is responsible for the transmission connections to a new city substation when requested by any of the four Municipalities. The City of Fort Collins has requested that Platte River build transmission lines to support the operation of the Fort Collins ' Portner Substation. The total cost of the project is estimated to be $ 12, 500,000 . Platte River will also install transmission line termination equipment in the new Portner Substation to support the City of Fort Collins distribution system expansion. The total cost of the project is estimated to be $3 ,500,000 . Platte River will provide additional breakers and substation equipment to support the City of Loveland ' s installation of a third transformer at the city ' s East Substation. The total cost of the project is estimated to be $3 , 800,000 . Platte River will install new security walls at three of its 230kV substations in Fort Collins, Loveland and Longmont. The total cost of the project is estimated to be $2,500,000 . The City of Fort Collins has requested equipment needed to support the addition of two 50 MVA transformers at the Timberline Substation. The city plans to use this substation capacity to serve new loads . The total cost of the project is estimated to be $ 1 ,000,000 . Platte River will update its existing security camera management software . In addition, new cameras, enhanced lighting and a new perimeter detection system will be installed in several substations . The total cost of the project is estimated to be $300,000 . Bond proceeds will also be used to fund additional transmission projects . 2 ATTACHMENT 5 Fort Collins Windy Gap Project Brief The Windy Gap Project was constructed in the early 1980s . It diverts waters from the Colorado River to Lake Granby for eventual delivery to project participants on the east slope of Northern Colorado through the Colorado — Big Thompson Project (C-BT) facilities. The point of diversion is near the junction of the Colorado and the Fraser Rivers . Diversions occur during periods of high flow, typically April through June. The Windy Gap Project is owned and operated by the Municipal Subdistrict, Northern Colorado Water Conservancy District (MS- NCWCD), of which Platte River Power Authority is a project allottee. Platte River anticipates delivery of 5 , 150 acre feet of Windy Gap annually, of which 4,200 acre feet are exchanged for 4,200 acre feet of Fort Collins treated effluent. The treated effluent is pumped to the Rawhide facility for use as cooling water. The remaining 950 acre feet of Windy Gap water is delivered to Rawhide from the Horsetooth Reservoir Soldier Canyon outlet. This water is used for boiler feedwater, site service water and for human consumption after treatment. In most years the Windy Gap Participants receive their Windy Gap allocations, however for about one third of the years deliveries are limited due either to lack of water in priority (dry years) or lack of storage for Windy Gap in the C-BT system (wet years) - ironically, the reliance on C-BT storage facilities restricts the capability of delivering full Windy Gap allocations during wet years . Consequently, the Windy Gap Participants, including the cities of Loveland, and Longmont as well as Platte River, are cooperating in the construction of a firming reservoir. This firming reservoir will be located near Carter Lake in Boulder County and will be named the Chimney Hollow Reservoir. Once Chimney Hollow Reservoir is constructed, Windy Gap water will be delivered through the C-BT system to fill Chimney Hollow. Once filled, the firming waters in Chimney Hollow can be reintroduced into the C-BT system for delivery to the Windy Gap Participants when Windy Gap water is unavailable at the diversion point or from Lake Granby storage . A Draft Environmental Impact Statement was issued by the U. S . Bureau of Reclamation in August 2008 . The Draft EIS identified a number of environmental issues and mitigation strategies. In conjunction with western slope water users two additional significant mitigation measures are being explored. The first of these would provide 2 ,300 acre feet of firm yield from the Windy Gap Project to the Middle Park Water Conservancy District (MPWCD) . Presently MPWCD is entitled to the first 3 ,000 acre feet of Windy Gap pumped annually, but this is not a firmed resource. NCWCD proposes to use its storage in the Granby Reservoir to firm deliveries in the noted amount. The second mitigation measure addresses flows in the Colorado River. NCWCD proposes to dedicate 2,700 acre feet from the Red Top Ditch allocation held by NCWCD to late summer releases . These late season releases will satisfy the requirements of the Upper Colorado Endangered Fish Recovery Program and will also enhance stream flow conditions in Grand County. Neither of these mitigation measures were discussed nor accounted for in the Op Ed article appearing in the Denver Post on October 26 . 3 ATTACHMENT 5 Fort Collins Graph of PRPA, Four Cities Revenues and debt Platte River Power Authority 10/29/2008 $ 1,000,000,000 $900,000,000 $800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $ 100,000,000 m v M Q) W m o m y in io n m o m a in n a m o N m v M W n n n n n n n n co w co w w co o� co w co m m m m m m m m m m o o O o o O o O m m m m m m m m m m m m m m m m m m m m m m m m m m m o o O o o O o O a0 m o ei ei ei ei ei e-I ei e-I ei ei ei ei e4 ei ei ei ei ei rl e-I ei ei ei ei e-I ei e4 N N N N N N N N O O ei O O O - Debt Outstanding - Operating Revenues -Sales to Fort Collins - Sales to Longmont - Sales to Loveland -Sales to Estes r�Park Long-term * Total Municipal Revenues DebtOutstandin Operating Revenues Sales to Fort Collins Sales to Longmont Sales to Loveland Sales to Estes Park 1973 $ 330,000 $ 1,579,048 $ 729,853 $ 434,928 $ 316,737 $ 97,530 1974 51800,000 41099,803 17931/304 1, 117,280 790,516 2601703 1975 35/000/000 5,808, 651 21699,028 1/610/638 1, 103, 139 385,622 1976 100,357,388 81548,404 3,8771503 21420, 188 11655,799 581,428 1977 177,5801752 11,805, 286 51254,479 31303,476 21452, 143 781,702 1978 1841570,360 16,9081478 71451,455 4/660/254 3,572, 650 11061, 293 1979 233,447,845 21,896, 531 9,363,550 51544,919 4,4001426 11353, 178 1980 31075661008 29,6911255 91644,006 57479/001 4,3291548 11213,313 1981 4061911,225 47,7031704 12,592,070 61751,388 5,4081500 1,593,081 1982 676,7881421 55,419, 645 18,563,887 9,765,596 71646,915 2,444,479 1983 804,525,307 585817391 191284,460 10,8691039 9,072, 646 21456,981 1984 7791217, 162 119, 3901923 19,227564 111624,329 9, 1541166 2,554,959 1985 7581353, 182 146, 3251184 20,0951907 11,363,434 9/ 229/967 2,6091606 1986 747,557,332 144, 746,972 20,7411312 11,473,756 91202,607 21586,739 1987 99112631978 145,239, 254 211713,799 11/933/511 9,535, 639 21664,905 1988 9801957,854 146,0271235 241275,872 12/555/398 10,2401644 21819,448 1989 96979621268 147,0171476 261208,733 137202/252 10,638, 289 21995,836 1990 8951846,838 142,6301293 271198,310 13/408/815 11,683, 775 31011,858 1991 8841945,034 138,2311632 281409,948 14/073/699 12,0291746 31256,205 1992 881,285,640 135, 138, 217 29, 161,963 151068,981 12,2051681 3, 153, 184 1993 6141331,358 138,4291215 311346, 184 16/ 193/312 12,788, 190 31121,931 1994 571,978,358 137,4651883 32,668,582 17/079/301 13,4361247 31109,290 1995 499,721,994 136,211, 627 341388,303 177778/794 14,403, 759 31212,265 1996 44912481833 135,957, 312 361631,507 18/789/239 15,230, 634 31347,421 1997 38518141977 128,2641005 37,409,047 19/ 102/ 184 15,8671633 31479,031 1998 37070711528 122,778,935 39,037, 151 207497/086 16,447,982 31529,310 1999 35217271076 126,772,974 401265,870 21/820/351 16,483,414 3,637, 161 2000 33410291876 138,0771477 431661,842 24/ 198/576 17,7641188 3 ,801,411 2001 323,056, 176 151,3131867 45,320,065 251587,946 18,3241483 3 ,831,607 2002 38914921220 131,525,473 471393,923 26/891/475 19,617, 327 41032,642 2003 35816541426 141,8651680 481524,782 271294,478 20,4161241 41081,919 2004 345,987,669 145,2621757 51,0791251 281712,825 21,365, 230 4,2911364 2005 3321702,688 151,0411726 55,685,531 31/269/994 24,525, 233 41590,883 2006 315,485,792 157, 1421925 551848,007 321012,770 25,479, 715 4,619, 186 2007 293,716,768 163,3781599 58,232,914 33 , 161,849 26,6401559 4,657,040 2008 ** 2721959,000 165,3211500 601134,900 34/445/000 28,580,000 41902,600 2009 ** 3731596,000 178,593,886 63, 184, 286 351991,945 30, 2241529 5,057, 101 2010 ** 352,261,000 183,6951764 67,281,288 381363,998 32, 1991813 5,397,308 * Debt Outstanding represents par amounts of long-term debt plus unamortized debt associated costs as reported on the Balance Sheets . ** Years 2008, 2009 and 2010 are projections . 4 ATTACHMENT 5 City of ,Fort Collins Platte River has also provided information on the individual Cities demand and energy growth. As noted by Brian Moeck in the meeting the Cities growth rates have been similar. Municipal Growth 1973 - 2007 Estes Park 7 18 11 153 % 2 . 69 % Fort Collins 50 296 246 491 % 5 . 21 % Longmont 29 169 140 481 % 5 . 16 % Loveland 20 146 126 630 % 5 . 84 % Total 106 628 522 493 % 5 . 21 % Municipal Demand Growth 350 300 250 3 200 ■ 2007 150 ■ 1973 100 50 2 .69 % Estes Park Fort Collins Longmont Loveland MWh 1973 ii Estes Park 32 , 671 130 , 067 971396 298 % 4 . 03 % Fort Collins 253 , 824 1 / 484 / 986 1 , 2311162 485 % 5 . 18 % Longmont 142 423 840 145 697 722 490 % 5 . 20 % Loveland 1101559 691 , 795 5811236 526 % 5 . 38 % Total 5391477 3 / 146 / 993 21607516 483 % 5 . 17 % Municipal Energy Growth 11600 , 000 11400 , 000 11200 , 000 11000 , 000 800 , 000 ■ 2007 600 , 000 1973 400 , 000 200 , 000 4 . 03 % Estes Park Fort Collins Longmont Loveland 5 ATTACHMENT 6 Utilities City0� electric o ater-wastewater•water Fort Collins 00 Wood Street PO Box 580 F Fort Collins,s CO CO 80522 970.221.6700 970.221.6619—fax 970.224.6003—TDD utilities Ofcgov.com /cgov.com/utillties MEMORANDUM TO: Mayor Hutchinson and City Councilmembers THRU: -Diane Jones, Acting City Manager Brian Janonis, Utilities Executive DirectorvP FROM: Steve Catanach, Light &Power Operations Manager CC: Patty Bigner, Brian Moeck(PRPA), Joe Wilson (PRPA),John Bleem(PRPA) DATE: October 23, 2008 SUBJECT: Supplemental information for the October 28, 2008 Work Session—Development of 3000 kW of renewable generation. During the October 28`h Work session, Council will be discussing the Power Supply Agreement between Platte River Power Authority and the City. One of the changes proposed in the Power Supply Agreement is a provision which allows the City to develop its own generation resources up to I% of its annual peak demand. This is to be generation owned by the City. There is no limit on the size or amount of generation that can be developed by our customers. One percent of our system peak is approximately 3,000 kilowatts (kW) of generation or approximately 60% of the City facilities demand. While 1% may seem like a relatively small amount of generation it is a fairly significant amount of generation on a distribution system. To give the Council an idea of scale I'd like to provide the following details on the size and cost associated with developing a solar plant, large wind turbine, small wind turbines or a hydro project. Please note that all of the costs estimates provided below are very rough ballpark estimates. More detailed analysis will be required prior to committing to any project or projects. • A 3,000 kW solar project would require approximately 15 acres of land and would cost between $25,000,000 and $30,000,000. At a cost of 25 million dollars the Return on Investment would be 32 years. (This assumes; no caring charges; a 4% increase in power costs per year; generation levels as modeled with NREL's PVwatts software) • 3,000 kW of large wind power would require siting a single turbine within an existing or developing wind project. The cost would be in the ballpark of$7,000,000. The Return on Investment would be approximately 11 years. (This assumes; a 30% capacity factor, no caring charges;4% increase in power costs per year) Cftyof �t�h • Small wind turbines placed on City facilities could also be considered. The cost of a small 2 kW wind turbine is typically around$5,000/kW. Installing 3,000 kW of small turbines would cost approximately$15,000,000. Approximate Return on Investment would be 19 years. (Assuming; a 30% capacity factor; no caring charges; 4% increase in power costs per year.) • In 2003 the City did a study on siting a small hydro generator at the dissipation vault on the Horsetooth intake for the City Water Treatment Facility. The study evaluated construction of either a 133 kW or a 339 kW plant. Both alternatives studied produced very positive results. The 2003 costs were$330,000 and $1,100,000 respectively resulting in an approximate Return on Investment in the five year range. L&P recently applied for a grant from the Colorado Water Resources and Power Development Authority to assist in a study to update the evaluation and costs produced in the 2003 study. There is not 3,000 kW of hydro generation available to the City. The study identified the levels above as the maximum. The change to the Power Supply Agreement provides the City the opportunity to develop small generation projects. Development of a 3,000 kW project would be a major undertaking. However, I believe the change provides us with the flexibility to take advantage of opportunities to develop smaller projects as they come along. An example would be the proposed 100 kW of solar panels planned for installation at the Pickle Plant as part of the Art in Public Places project, or if still cost effective, development of a small hydro plant. Projects will have to be evaluated on an individual basis, and certainly as new technologies develop we will have to evaluate those. This change gives us the ability to explore new options. Please let me know if I can answer any questions or provide any additional information. ATTACHMENT 7 PLATTE RIVER POWER AUTHORITY Estes Park • Fort Collins • Longmont • Loveland December 19,2008 Mr. Steve Catanach Light&Power Manager City of Fort Collins P.O. Box 580 Fort Collins,Colorado 80521 Re: Municipal Ownership of Electric Generation Dear Steve, Pursuant to your request, attached is an opinion letter from our bond counsel addressing the possibility of increasing the de minimis municipal generation exception contained in the draft power supply agreement to ten percent of peak load. By way of background,for the first time since the creation of Platte River as the generation and transmission provider for Fort Collins in 1973, the draft power supply agreement under consideration contains a provision that allows Fort Collins to own and operate new municipal generation. Referred to as the de minimis exception, this provision allows new municipal generation in an amount of one percent of the peak load of Fort Collins. Accompanying the de minimis exception is language to the effect that if Fort Collins installs generation in an amount that meets this one percent threshold, the parties will revisit this limitation. Inclusion of the de minimis language allows Fort Collins to install generation in variance of the all-requirements provisions of the power supply agreement sufficient to meet well over half of the demand at municipal facilities—an opportunity that does not exist under the current contract. We are all painfully aware of the constriction of available capital in the debt markets. Today, the municipal bond market is very much a buyer's market. Increases to bondholder risk can make issuances unmarketable or significantly increase the interest costs. Suffice it to say that if we were vetting the one percent de minimis threshold with rating agencies today, their reception to this exception to the blanket protections presently available to bondholders would be uncertain. That having been said, we are moving forward with our next bond issuance and the Official Statement will include disclosure of the proposed de 2000 East Horsetooth Road • Forf Collins, Colorado 80525-5721 970/226 4000•VWWi prpa.org Mr.Steve Catanach City of Fort Collins December 19,2008 Page 2 minimis exception. We believe this evidences the commitment of Platte River to work with Fort Collins and the other owner municipalities as they explore distributed generation as a component of their local resource mix. With that context,I will let the letter from bond counsel speak for itself. Sincerely, Brian H. Moeck General Manager Enclosure: Letter from bond counsel cc: Bob Goehring, Utilities Director,Town of Estes Park Mayor Doug Hutchinson,City of Fort Collins Brian Janonis,Utilities Executive Director, City of Fort Collins Mayor Roger Lange,City of Longmont Ralph Mullinix, Director, Loveland Water and Power Mayor Gene Pielin,City of Loveland Mayor Bill Pinkham, Town of Estes Park Tom Roiniotis,Director,Longmont Power and Communications Joe Wilson, Esq., Platte River Power Authority Dave Smalley,Chief Financial Officer,Platte River Power Authority k i ATTORNEYS R COUNSELORS AT LAW 633 S5T EFMH STREET.SUITS 3000 Sherman & Howard LA-C. °BONE 03�29 Z _ FAX 303 29SM40 OFFICES IN:COLORADO SPRRNM STEAMBOAT SPRINGS•VAN.•PHOENIX REND•iASVEGAS•ST.LOUIS December 19,2008 Joseph Wilson,Esq. Platte River Power Authority 2000 East Horsetooth Road Fort Collins,CO 80525-5721 RE: Fort Collins Inquiry concerning Municipal Generation Dear Mr. Wilson: We understand that over the last several months, Platte River Power Authority ("Platte River") and the City Councils of your member cities (the "Member Cities") including the City of Fort Collins ("Fort Collins"), have been considering proposed amendments to the organic contract establishing Platte River and to its all-requirements supply contracts with each Member City. The proposed amendments would extend the term of the existence of Platte River and of the all-requirements contracts through 2050, (extending the current terms running through 2040 by ten years). The proposed power supply agreements contain a new provision that would allow a Member City to install its own generation capacity up to an amount equal to one percent of the peak load of that Member City. This provision would modify the "all-requirements" protections currently contained in the existing power supply agreements. In connection with the proposed extension, a member of the Fort Collins City Council has asked about the legal and financial implications of an amendment that would allow Fort Collins to install generation in a capacity amount up to 10% of its peak requirements. This letter will examine the legal implications of the proposed amendment in light of Platte River's existing bond covenants and will offer the writer's perception of how such an amendment would be viewed by the bond rating agencies. We are rendering this opinion in our capacity as Platte River's bond counsel. As bond counsel to Platte River, Sherman & Howard advises Platte River in connection with structuring new bond issues and renders an approving opinion on the validity and enforceability of Platte River's bonds,as well as advice in connection with compliance with Platte River's covenants for the benefit of outstanding bonds. Fort Collins is one of four municipalities ("Member Cities") that established the Platte River Power Authority, a separate governmental entity and political subdivision pursuant . to Section 29-1-204, C.R.S. (the"Power Authority Act"). Fort Collins executed and is a party to an organic contract with the other Member Cities, originally entered into on June 17, 1975 and amended and restated as of July 1, 1998(the"Organic Contract"). The creation of a mechanism by which Colorado municipalities could jointly finance costly generation and transmission projects was the primary purpose of the Power Authority Act. Platte River was created under this statute in order to finance and construct e• Sherman & Howard L.L.C. Joseph Wilson,Esq. December 19,2008 Page 2 generation and transmission facilities and act as a wholesaler of electrical power to and for the benefit of the Member Cities, which in turn retail the power to their respective residents. The clear purpose of Platte River is to provide a financing mechanism for the wholesale electric power and energy requirements of its constituent municipalities(Organic Contract Section 2.1). Platte River has issued and there is now approximately $300 million of long-term bonds maturing through June 1, 2018'in the hands of investors. (The typical long-term bond issue in the municipal power sector is structured to amortize over a 30 year tetra from either its issue date or the date the project it finances comes on line.) Platte River has issued virtually all of its long-term bonds under a General Power Bond Resolution adopted in 1987,which contains the pledge of revenues and covenants required by bond purchasers as security for Platte River's repayment obligations. Except to the extent of surplus sales receipts, Platte River's bonds are payable from the revenues derived from its sale of wholesale energy to its Member Cities, including Fort Collins. We understand that Platte River's long-term bonds have been rated in the second-highest category ("AA") by each of the three municipal rating agencies for the last 10 years. In addition to being a party to the Organic Contract, Fort Collins is a party to an Amended Contract for the Supply of Electric Power and Energy,dated July 1, 1998(the"Supply Contract") whereby Fort Collins agrees to purchase from Platte River all electric power and energy that Fort Collins requires for its municipal electric system. The Supply Contract remains in effect until December 31,2040, or until thereafter terminated following six-months notice. Platte River is obligated, pursuant to Section 6.06(b) of its General Power Bond Resolution,to enforce the provisions of the Supply Contract. Platte River has further covenanted not to "consent or agree to or permit any rescission of or amendment to any [Supply Contract] which will in any manner impair or adversely affect the rights of the Authority thereunder or the rights or security of the bondholders under the Resolution." Article I of the current Supply Contract provides that: Platte River shall sell and deliver to Fort Collins and Fort Collins shall purchase and receive from Platte River all electric power and energy which Fort Collins shall require for the operation of its municipal electric system to the extent that Platte River shall have such power and energy available; provided, however, that Fort Collins shall have the right to continue to generate its own power and energy to the extent of the capacity of its generating facilities in service on September 5, 1974. ' Fort Collins' contract with Platte River is made payable solely from revenues to be received from the sale of electric power and energy to its electric utility customers during the term of the contract. As acknowledged in the recitals, each of the other Member Cities entered into substantially similar supply agreements with Platte River, in connection with execution and delivery of the Organic Contract,and upon extension of the term of such supply agreements. Sherman & Howard L.L.C. Joseph Wilson,Esq. December 19,2008 Page 3 The Supply Contract is a "requirements" contract. These supply contracts with the Member Cities constitute the primary source of revenues over the 30 to 35-year life of the Platte River bonds issued to construct electric generation and transmission facilities. Since Platte River has no retail customers; it is dependent upon the revenues it receives from the Member Cities to service debt. It is for this reason that Platte River's bond resolution contains the covenant by Platte River to enforce each Supply Contract and not to amend the Supply Contracts in a manner that adversely affects the holders of its bonds. Over the last 30 years, we have had to consider a number of proposed arrangements involving acquisition by a Member City of additional power from small generation facilities. For example, under the Public Utility Regulatory Policies Act ("PURPA'), which requires electric utilities to buy power from non-utility cogeneration and small electric generation facilities at the "avoided cost" rate, Platte River and the Member Cities entered into parallel generation purchase and sale agreements. (However, we understand no projects under PURPA have been implemented through these agreements.) More recently, Platte River has been approached about Member Cities potentially purchasing (e.g., pursuant to a net metering arrangement) energy from small solar or cogeneration facilities. Given the de minimus size of the projects and the likely amount of energy from such sources, and the unlikelihood of any economic harm to Platte River from such sales, we have advised Platte River that we could see no legal need for Platte River to insert itself as purchaser of such energy. (We understand that none of the renewable projects in fact were implemented.) When Platte River initiated the renewal and extension process for the Organic Contract and the Member Cities supply contracts approximately one year ago, we were approached by you. You expressed a desire to eliminate the de minimis project-by-project analysis with an amendment quantifying a comprehensive exception to the all-requirements obligation within the supply contracts. After conferring, we agreed that defining an objective level for the Member Cities to pursue renewable generation on the face of the agreements made sense, for three reasons. First, including the exception to the all-requirements obligation as a provision of the agreements would permit objective disclosure in future Official Statements (i.e., the offering documents for Platte River bonds)as opposed to the individual de minimis analysis, the existence of which had not been disclosed to prospective bond buyers. Second, a specific level for allowable municipal generation, provided that did not jeopardize the security upon which bondholders relied, would allow the Member Cities to craft individual renewable portfolios. Finally, Platte River could achieve administrative savings by avoiding involvement in small project review, documentation and implementation. The concept of including a small quantified exception to the prohibition on municipal generation within the supply contracts was subsequently discussed with staff members representing the Member Cities. Through these discussions it was determined that a municipal generation level set at one percent of the peak was satisfactory to the municipal representatives. This would allow a total of over six megawatts of municipal generation spread among the Member Cities, which would represent a significant increase over the past developments under the de minimis case-by case approach. When we were approached as bond counsel with this one J Sherman & Howard L.L.C. Joseph Wilson,Esq. December 19,2008 Page 4 percent threshold we reviewed legal authorities to determine whether Platte River would be permitted to enter into an amendment to the Supply Contracts including the objective one percent exception. The legal issue presented is one of compliance with Platte River's covenant under its bond resolutions: does the amendment, taken as a whole, "in any manner impair or adversely affect the rights"of Platte River or the bondholders? We have examined contract law generally and Colorado case law in particular, and while we found no authority directly in point, have determined that under principles of the Restatement (Second) of Contracts (as adopted by the Colorado Supreme Court), the key factor is whether under all the facts and circumstances, Platte River is deprived of any substantial benefits expected under the contract. National Propane Corp. v Miller, 18 P3d 782, 789(Colo. App.2000); . On its face, allowing the Member Cities to generate up to six megawatts of power and reduce and purchases from Platte River by such amount would appear to adversely affect Platte River and its bondholders, since it marginally decreases the ability of Platte River to cover its fixed costs through billing the Member Cities, and to that same extent exposes Platte River to the risks of having to sell up to six megawatts of surplus power and energy on the open market. However, it is also clear that Platte River management may take into account the net benefits which it (and its bondholders) will receive from (i)the extension of the term of the Supply Contract itself and (ii) from its non-involvement in a host of small renewable energy projects with unproven reliability and cost-benefit ratios. Subject to verifying that the amendment will not adversely affect Platte River's ratings on its outstanding bonds (discussed below), we have concluded That, while it is close question, Platte River may enter into the proposed amendment to the Supply Contracts including the provision of additional municipal generation of up to one percent of municipal peak. (We would recommend including a provision dealing with the admittedly unlikely event that a Member City peak declines in a future year.) In early 2008, we determined that it was advisable to consult with the rating agencies concerning the proposed negotiation of an objective exception to the prohibition on municipal generation. As mentioned above, part of the legal analysis depends on whether existing bondholders would be materially damaged by the amendment. Apart from the general economic cost-benefit for Platte River, if the change were to result in a downgrade of the ratings on Platte River's outstanding bonds, Platte River would not be permitted under its covenants to enter into the amendment. This writer had conversations with representatives of Moody's Investors Service and Standard & Poor's rating agencies in early 2008. In my discussions with the rating agency representatives, I presented the case for such an objective quantification (as opposed to the case by case de minimus standard) as beneficial to Platte River, particularly in avoiding the administrative burden of inserting Platte River in many small and non-economic co- generation projects. Based on those conversations, the concept of amending the Supply Contracts to provide an express standard of one percent of municipal peak for such co-generation did not raise the prospect of any rating downgrade for Platte River bonds. I would caution, however, that the formal rating process on Platte River's new proposed bond issue will provide the only definitive judgment on that point. r Sherman & Howard L.L.C. Joseph Wilson,Esq. December 19,2008 Page 5 As bond counsel we have concluded that Platte River may enter into an amendment to the Supply Contracts extending the term and including a one percent of peak exception to the prohibition of municipal generation. However, based on my understanding of the financial importance of the exclusivity of the requirements contract to maintenance of Platte River's ratings this would be the maximum threshold consistent with its obligations under its bond covenants. In our opinion,an amendment to the Supply Contract permitting Fort Collins to own and operate generation up to 10% of its peak load requirement would not be consistent with Platte River's covenant to enforce the Supply Contract and not to consent to amendments adverse to the security of existing bondholders. The surplus capacity associated with such a 10% of peak exception could expose Platte River and its existing bondholders to substantial financial risk. Such risk, in our opinion, would completely outweigh any benefit from the contract extension or cost savings to Platte River. Please contact me if you have any questions concerning this letter or if you wish us to do anything further. Respectfully submitted, PuonM92e912.1 ATTACHMENY8 Fort Collins Utilities Electric Board Minutes Special Meeting Tuesday,January 20, 2009 Electric Board Chairperson Citv Council Liaison John Morris, 377-8221 Wade Troxell, 219-8940 Electric Board Vice Chairperson Staff Liaison Dan Bihn, 218-1962 Robin Pierce, 221-6702 Roll Call Board Present Board Chairperson John Morris, Vice Chairperson Dan Bihn, *Tom Bamish, Steven Wolley, *John Harris and Steve Yurash Board Absent John Graham Staff Present Meagan Peil, Steve Catanach, Robin Pierce and Jenny Lopez-Filkins Guests Joe Wilson, John Bleem and Eric Sutherland Meeting Convened Chairperson John Morris called the meeting to order at 5:32 p.m. Public Comment Citizen Eric Sutherland would like to make a comment related to the last City Council meeting and the question that was asked of him, if he read the Energy policy and he has read the Energy Policy. Also, he has suggested that the City of Fort Collins Electric Board is not immediately concerned about the citizens of Fort Collins. It is irresponsible of City Council to have to sit through more of these issues without the consideration of the Electric Board and the PRPA contracts are not an exception. And the Board is not aware of the fact that our service area protection would be violated because the Council cannot overturn State Laws. Our future and national security are in the balance. Net Meterina and Service Code-Formal Recommendations Light and Power Operations Manager Steve Catanach would like the Board to look at the net metering and code change with a formal recommendation. That would be in the form of a letter or memo from the board itself. 1 This will rap up the last four months of our discussion of net metering and code change and Council needs guidance from the Board before work sessions and has asked specifics. These are difficult issues that they will need guidance for. Key discussion points for net.metering are the purchase of annual excess energy from our customers for the retail rate and we establishing the net metering maximum as 1 M W; how the tariff rate will be used after the I MW generation. The service code language states clearly that PRPA and the City would recover all of its costs directly or indirectly; as we moved on with the discussion wanted to break the identifiable costs out and those are PILOTS (Payments in Lieu of Taxes), insurance and infrastructure. City Manager Darin Attebury has recommended adopting a waiver of the PILOTS for three years due to the possible impact on the general fund. Also, recommended is coming and reexamining the codes and PILOTS in three to five years. The'concerns of insurance were that if a customer's facility could impact other customers negatively then the customer would be required insurance. Board recommendations were the Sunset provision, insurance, and the impact on our infrastructure and the costs to us for that. Should the payment be from the customer or utilities if there is an impact on our infrastructure? For example, you have twelve homes on a transformer and all of those customers put on a solar unit and hit maximum generation and that would overload our transformer. Who is responsible for the transformer upgrade? The recommendation from Council is to accept a certain limit we would pay for costs and then when the customer hits the limit then they would absorb the costs. Also, on the commercial side,we would ask the commercial customer to absorb the cost of the equipment. What is the standard for the state coverage or with Xcel regarding insurance coverage? Xcel energy did not have any mention of the insurance on their website but Austin did have a requirement for insurance. Do they even have insurance coverage for this through someone like Slate Farm? Not sure what kind of insurance coverage it is. We will look into it. Would that be home owner's insurance? Just as far as the liability issue of the unit and if something were to go wrong. The risk for residential is minimal compared the risk for the larger commercial systems could be. We There are houses on a cul de sac with a transformer at the end, three of those houses put solar panels on their houses and covers their demand, would that cause problems to the transformer? On a solar installation there would be very little affect on the transformer because they would not have the momentum feed into the system to affect voltage. However, a small wind turbine could because it has the momentum to feed into the system. What about the use of an electric generator? 2 The generators are not a problem in most cases because the owner has to transfer the power with a transfer switch and generators do not operate in parallel with us. Large industrial arch welder with a computer company right nest door and welder has caused issues with the computer company and their service, how do you handle that? There are rules and regulations that would require the customer to correct to any damage to our system. What if someone doesn 't have a reduced voltage starter? Provision to require them to correct it and send the power back to us and it is usually after the fact. Is there anyway to protect against this type of situation? There are expensive treatments that we would ask home owners to have and maintain. We are going with motor generators that parallel to our system. We are also developing a piece of switch gear that will fundamentally disconnect before something goes wrong. Service code change is geared to the third party generators which would be over a certain amount. Our goal is to address these issues in the code. Could we mention in the code that we have insurance but with lack of insurance will not relieve you of liability? This would be brought with the interconnections standards and the interconnection agreements. Recommendation would be to address the insurance in interconnection agreements. Where is the actual language of the code? We do not have the actual language because the intent was to go to Council for recommendation and then the recommendation of the Board and then proceed with the written language. We are not asking for an approval of the language we are asking you to give recommendations on how we would put the issues into the language.and those issues are PILOTS, insurance and third party generators. Assistant City Attorney Jenny Lopez-Filkins has suggested that the PILOTS needs to be addressed in the service code change because of it being a financial issue. Also, PILOTS is mentioned in the interconnection agreement and infrastructure, insurance, and indemnity agreements will be in the interconnection agreement and not necessarily in the service code change. This would cover all bases in this type of situation. The Board would like to see more from the insurance side and what is being done throughout the state not just in Austin because if a homeowner sees the need for certain insurance than no one will put a solar unit on their residence. Are referring to certain code sections? These recommendations from the Board will go to Council, in turn Council will make their recommendations, the code is written and Council will then vote on the way it will be written. 3 * Tom Barnish and John Harris excused themselves due to the association with PRPA (Platte River Power Authority) and will not vote on the amended contract agreements; they left at 7:02 p.m. Remaining members are Chairperson John Morris, Vice Chairperson Dan Bihn, Board Member Steve Yurash and Board Member Steven Wolley. PRPA (Platte River Power Authority) Agreements Organic Contract and the Energy Supply Contract Light and Power Operations Manager Steve Catanach brought the contracts in July 2008 to the Electric Board as an information item and now it has been found that the Board needs to recommend to Council to adopt the amended contracts with PRPA. Organic Contract is fundamentally the bylaw structure of Platte River and how it operates, structure and how they are run. This is a contract between all four cities and PRPA and not just the City of Fort Collins. The original contract was established in 1975 and then amended in 1998 and 1999. This contract must be approved by all four cities and that establishes the governing structure. The Board of Directors of PRPA is made of two members from each of the cities and the mayor is automatically placed in one of the positions and historically, the other position being filled by the Executive Director of Utilities. The amendments in 1998 added some additional functions to PRPA and Fort Collins contracted PRPA to house and maintain our Banner billing system and for Fort Collins to use the phone fiber system and PRPA has the right to contract that out also. The amendments that are proposed now are actually minor and it is adding renewable resources to the type of resources for electric energy that PRPA will provide to the City. This will add the development of products and services in support of efficiency improvements for generation, transmission and use of electrical energy to the list of services, functions and facilities that PRPA can provide to the cities. Also, the contract amendments would clarify the expiration dates of the terms of the appointed directors. There is no multiple term limit it is simply a date that those terms will be taken back to the governing bodies to reseat someone to the Board of Directors. Another amendment in the contract, the ability of the appointed directors to attend the meeting in a teleconference style and it would be considered attendance of the Board meetings. The current contract states the General Manager would be replaced by the Chairperson of the Board of Directors and this in the case of retirement or leaving and the contract would amend to give the Board of Directors the authority to appoint a new General Manager. Another amendment would extend the contract for another ten years and would expire December 31, 2050. The contract is generally brought every ten years and the goal being to keep the contract far enough out that the contract does not expire before the bonds due. 4 The other contract that is in question is the contract for supply of power and energy with PRPA. This contract is confusing but it is the melding of two different contracts in this agreement. The facilities agreement with PRPA that designates responsibility for the substations, grounds keeping and maintenance and is a separate agreement that will now be a part of the contract for supply of power and energy. In addition to this, the contract will state that PRPA will be the sole provider of electrical energy to the City of Fort Collins and we will only purchase from PRPA. We are guaranteed customers of PRPA. In the existing contract it states it will not allow any internal generation but the proposed amendment will allow the City to develop one percent of the peak load. The new contract would give the City the ability to generate electricity to sustain their buildings. The one percent is only for the cities facilities use and is not referring to the generation for residential or citizen use. What if we put a wind generator on this building, is that what we are talking about? We could but we have other opportunities like hydro. What is the intent of developing the Cite its own renewable energy? It will open the door for us, for example the pickle plant and solar array that is considered art in public places but it will be generating electricity. Is there a way to make it clearer? Council now understands what it means in the contract and that it is a contract between the cities and PRPA not with citizens. As far as the facilities agreement portion, it is stating it will reduce the time period of four years to two years of notification for the replacement of a substation unless transmission is required then we would be required to continue with the four year notification. Also, this would allow each party would have access to the substations and license to occupy the substations. This will also cover that neither party will be in default of their obligations if they can not fulfill their obligations due to uncontrollable forces, i.e. forces of nature like a tornado knocking a line out. The term of the contract will also be extended and the goal of the extension is to have a contract in place to cover a loan. The PRPA are showing the bond persons that they have a source of income. Can the bond go past the termination date? Without the contract it will up the risk to the bond analyst and there should be a customer for the term for the loan. It would be very unlikely for the bond to go past the 2040 date, however, there could be a bond issue in the upcoming years and would the contract would cover that bond issue to 2050. This is the criteria for the bond ratings from the CFO (chief financial officer) of PRPA and what Moody's looks at for the issuance of a bond. There needs to be almost a complete monopoly for providing electricity energy, issue tax exempt, strong link with local government and there needs to be a market position for the bond. 5 What about the parallel generation? What Poudre School District decided to go with Sun Edison and put in a 3 AIJV system? The contract would not be affected because the contract we are looking at is not about citizen generation but the generation between PRPA and the City. A 3 MW system would be in the service code language above the 1 M W system thresholds because it would be third party generation. However, it would affect the infrastructure and would really need to be looked at before putting that kind of system in to play. There would also be a different buy/sell agreement and the costs would affect all the parties. This would also be with the PRPA tariff 3 and other costs with the ancillary costs. We would work with someone with a generator this type of system. How would you collect on a tarif}? That would be in the buy/sell agreement and that would be in the retail rate agreement. If they would generate we would purchase at the retail rate. The buy/sell agreement would be covering all the costs. We have no experience with an actual situation but we do have this in place to cover if we do have renewable resources like another generation system. Motion of the Electric Board is to recommend to City Council the adoption of contracts with amendments. Motion passed unanimously. Adjournment The meeting was adjourned at 8:15 pm following a motion to adjourn by Board Member Yurash. Submitted by Meagan Peil, Electric Board Secretary Fort Collins Utilities // Approved by the Board on 7 2009 Signed Meagan Peil D 6 ATTACHMENT 9 Utilities—Electric Board 700 Wood Street City of Fort Collins Box 580 97 Fort Collins,CC 80522 970.221.6702 970.416.2208—fax fcgov.corn/utilities Date: January 21, 2009 To: Wade Troxell, City Council Member and Electric Board Liaison From: Fort Collins Electric Board Re: Amended and Restated Organic Contract and Amended Contract for the Supply of Electric Power and Energy At the January 20, 2009 Electric Board meeting the Electric Board endorsed the Amended and Restated Organic Contract between the Cities of Fort Collins, Longmont, Loveland and Estes Park and the Contract for the Supply of Electric Power and Energy between the City of Fort Collins and Platte River. The Electric Board felt that the existing agreement with PRPA has assured our community highly reliable and extremely affordable electric power since its inception. A reference to environmentally responsible resource options updates the contract to indicate current City goals. The proposed modifications that allow the City of Fort Collins to generate power and energy for its own use from any new generation resource(s) owned and operated by Fort Collins provided that the total rated capacity of all such new generation is no greater than 1,000 kW or one percent of the peak load of Fort Collins, whichever is greater, provides outstanding flexibility for the City to promote renewable energy in its city owned facilities. Additionally, language has been added which specifically details that PRPA will provide services and products that improve the efficiency of generation, transmission and use of electrical energy. To insure the strength of Platte Rivers' bond rating (AA), the Cities designated PRPA as the sole provider to all four entities. This limited the amount of generation the cities could develop on their own. Although the Electric Board supports local renewable energy options, the Board feels that maintaining PRPA's AA bond rating is in the City's best interest and decisions that impact this rating could cost the City several hundred thousand dollars annually. The Electric Board respectfully recommends that the City Council approve the Contracts. The Board voted 4—0 (excluding two members that recused themselves).in favor of recommending to Council adoption of the Contracts. Cc: Mayor and City Council Members Darin Atteberry, City Manager Brian Janonis, Utilities Executive Director Steve Catanach, Light & Power Operations Manager ATTACHMENT 10 I PLATTE RIVER POWER AUTHORITY Estes Park • fort Collins • Longmont • Loveland January 22,2009 Mayor Doug Hutchinson 1315 Whedbee Street - Fort Collins,Colorado 80524 Original letters also sent to: Fort Collins City Council Members City Manager, Darin Atteberry Re: iRenewal of'th'e 0iganic`Coritraet arid'`Fort'Collins Power,Supply.Agjeemenf Dear Mayor Hutchinson,City Council members and City Manager Atteberry: We look forward to meeting with you on February 3 to seek approval of the Organic Contract and Fort Collins Power Supply Agreement. The purpose of this letter is to provide background information on this item,and to emphasize,several options whereby Platte River can help support City Council's initiatives related to energy supply policy and climate action. Contract Changes-To begin,we would like to summarize changes that have been made to the Organic Contract and Power Supply Agreement. Key updates include the following: • A new provision is being added to the Power Supply Agreement to encourage distributed generation developed by the owner municipalities; • Emphasized importance of efficiency, demand side management and renewable energy resources in future planning; • Integration of the existing Transmission Facilities Agreement into the new Power Supply Agreement; • Extended the term of the contracts from 2040 to 2050; • Added focus regarding environmental stewardship and sustainability. Local Distributed Generation-We understand that development of local distributed generation is important to City Council,particularly from renewable sources. Platte River supports such generation,which can be implemented via several scenarios,including those summarized below. • Municipal facilities - As indicated above, the updated Power Supply Agreement now i provides that generation can be developed by Fort Collins to serve municipally owned buildings and facilities (offices,pools,community centers, etc.). The amount of such generation is one percent of the municipal peak load. This means that the City can 2000 Easi Horsetooth Rood `-or' Collins, Colorodo 80525.5721 97Q/22h-1(Y�: ..:;i Arno org i Mayor,Council Members, and City Manager January 22,2009 Page 2 develop roughly 3,000 kW of these type facilities,which is enough to meet about 60 percent of their peak load. If Fort Collins installs generation sufficient to reach this threshold, the Power Supply Agreement commits Platte River to discuss in good faith an increase in the amount of such generation. • Customer-owned generation- For many years customers in Fort Collins have been installing distributed generation to help serve their electric needs. Platte River's tariffs have provisions for net metering of customer-owned generation and about forty such systems are operating in the four owner municipalities (mostly PV solar). Platte River becomes involved in Customer generation when these systems are of a size that requires scheduling,which is at or above 1,000 kW. Combined heat and power in commercial or industrial facilities may be an option for this size range. No system this large has yet been installed,but a few local sites may have potential. •. Generation developed by"third parties' and sold via long term contracts- In this case, "third party" refers to distributed generation entrepreneurs (not a customer and not the municipality) that have developed a business model under which they propose to purchase, install and maintain a generation system on a customer's property. The generation output.would be sold to the host property owner under a long-term contract. After consultation with bond counsel,Platte River has determined it would treat these developments as if they were net metering situations and not require any contractual arrangement with the third party unless the rated capacity of the generation system is 1,000 kW or greater. At this size,Platte River needs to be involved for operational reasons. To address both the operational issues associated with larger generators and for purposes of the Platte River bond covenants,we are suggesting that a "buy/sell" arrangement be formulated in these circumstances. As noted in the outline for buy/sell agreements that was distributed to City Council for the January 13 meeting,this form of contract would keep Platte River in the chain of title,but would not alter the financial arrangement between the distributed generation entrepreneur and the host property owner. Generation developed by Platte River-Though third party entities may bring advantages to renewable projects (tax credits,etc.), Platte River would also like to have an opportunity to develop local renewable projects for the owner municipalities. There may be benefits to both the City and Platte River from such generation sources, and I Platte River has significant experience in working with local entities to develop electric generation. • Off grid generation- Generation that is not connected to the grid can be installed locally, with no concerns or involvement by Platte River. A few small systems like this exist in the City. Mayor,Council Members,and City Manager January 22,2009 Page 3 As indicated by these scenarios, many opportunities are available for customers,municipal facility operators, third party developers and the City (working with Platte River) to implement significant levels of distributed generation in Fort Collins. Platte River supports this type generation,as evidenced by the significant efforts Platte River has undertaken to ensure that legal roadblocks are minimized. Carbon Policy- It is clear that reducing greenhouse gas emissions is important to City Council, as provided in Fort Collins' Climate Action Plan. Carbon policy is also a significant issue for Platte River. We were the first utility outside California to join the California Climate Action Registry and were named a Climate Action Leader in 2007. We are also a founding member of the evolving national registry (TCR) and a partner in the local Climate Wise program. In December,Platte River became the first electric generator in the State of Colorado to submit a resolution to the Governor's Energy Office (GEO) committing to submit a plan for reducing greenhouse gas emissions to 20 percent below 2005 levels by 2020. This resolution,passed unanimously by Platte River's Board,provides that the plan be delivered to the GEO by June 1 of 2009. We have issued an Invitation to Bid to hire a consultant that can assist in developing a roadmap for carbon policy planning and will gather input from each owner municipality as the plan is developed. We anticipate the plan being approved by Platte River's Board at their meeting in May. Platte River can assist Fort Collins in meeting its carbon goals,since a significant portion of city emissions are related to electricity generation. Options such as increased energy efficiency, additional renewable energy,natural gas fuel substitution and combined heat/ power systems (cogeneration) could be considered if Fort Collins has an interest in these options. Some options may be developed to serve all the owner municipalities,but there may also be opportunities to provide unique resource options to Fort Collins (at unique rates). Wholesale Renewable Energy Supply-While we understand that local distributed generation is of primary interest to City Council, Platte River can provide additional wholesale renewable energy from new sources in the region. We currently plan to add 12,000 kW of new wind generation resources by the end of 2009, anticipating an investment of over$60 million during. the 20-year term of operation for this new plant. We have also identified opportunities for acquisition of wind generation above this level for 2009 (and beyond). Additional wind generation was offered at the April 2008 City Council meeting,but the City was not prepared to make such a purchase at that time. In December,we identified another project that could provide additional wind energy to the City. If Fort Collins has an interest in expanding this type of renewable supply,Platte River can proceed quickly to increase new wind plant j commitments specifically to serve Fort Collins. Note that options we have evaluated for ; delivery by 2009 would require immediate action. j Though wind generation has been the most cost effective renewable energy supply to date, 1 Platte River is also evaluating solar generation,particularly systems with storage capability (concentrated solar power) to make this generation source more predictable. A large,locally placed solar system could be considered for supplying Fort Collins,if the City is interested and Mayor,Council Members, and City Manager January 22,2009 Page 4 finds the associated costs acceptable. Platte River installed one of the first photovoltaic (PV) solar systems in Fort Collins, and this system has operated since 1986. We have used it to displace electrical loads at our headquarters office complex and to operate two zero enussion electric vehicles. This system was very expensive,but has operated well for over 20 years. Looking forward,the City and Platte River can jointly consider unique approaches to addressing the net cost of solar supply to Fort Collins,including building larger systems, adding storage capability,integrating unique incentives/pricing,selling offsets (perhaps to the Colorado Carbon Fund or other parties) and other options as they are identified. In late 2006,Platte River hosted a regional meeting on wood biomass generation,involving large customers,Colorado State University,the Forest Service, the Governor's Energy Office, local biomass consultants and others. Though the group agreed that many challenges exist, particularly long-term, reliable fuel supply,there may be an opportunity for a modest-sized wood biomass generation facility in the region. Platte River has also closely monitored and provided support for the Maxwell Ranch project. We were involved when this project was first considered in the early 1990's,as part of a statewide assessment of wind generation potential. In 2007,in conjunction with our most recent request for renewable generation proposals,we sought a response from the entity that is currently developing the project: We continue to support discussions related to development of the project,and if there is commitment on the part of Colorado State University, FORTZED, the City of Fort Collins and/or other entities,Platte River could purchase energy from the project, deliver it to the City through our transmission system and acquire the necessary balancing and regulation services for wind generation resources at the site. New renewable generation resources could also be added to replace existing REC-based supply. New plant resources are much more expensive than REC-based sources,but may provide other values that are important to Fort Collins. Fort Collins Utilities and Platte River staffs are working together on an analysis of options for changing the wholesale renewable mix provided to Fort Collins. We have also met with the other owner municipalities to discuss potential alternatives to the current renewable supply tariff. Platte River could reduce the REC-only supply to Fort Collins,by re-selling or otherwise disposing of a portion of RECs currently under contract. The other owner municipalities may have an interest in the surplus RECs and there are likely options to sell these RECs in the broader renewables market. Also, Platte River has offered to develop a new approach to renewable supply going forward,whereby the owner municipalities could choose the level of each type of supply that they require (REC-only or energy with RECs). If Fort Collins is interested in changes to current supply,we are ready to respond during 2009. Any change to Platte River's current Renewable Supply Policy and associated tariff would require approval by Platte River's Board of Directors and any net costs associated with REC sale or disposal would be borne by Fort Collins. Demand Side Management(DSM)-Since 2002,Platte River has invested over$5 million in energy efficiency and demand side management programs within the owner municipalities, and we anticipate spending about$10 million over.the next five years. Over two-thirds of the Platte River funds associated with these programs have been provided to customer projects in Mayor,Council Members,and City Manager January 22,2009 Page 5 Fort Collins, even though Fort Collins represents less than 50 percent of Platte River's municipal load. Additional funds have been provided by the City for DSM programs. DSM reduces customers' utility costs,supports local and regional efficiency industry, enhances the environment within homes and businesses, and reduces greenhouse gas emissions. From our analysis to date, DSM is clearly the most cost effective means of reducing carbon emissions and will be a major focus in coming years. The partnership with Fort Collins Utilities for implementation of DSM programs has worked well in the past and we anticipate continued cooperative success as programs are expanded in the future. Smart Grid-Platte River supports Fort Collins Utilities as it considers new"smart grid" technologies for enhancing system efficiency,reducing consumption and enhancing customer communications. We are working with Fort Collins Utilities to support the FORTZED project, are developing information regarding generation cost variations over time to support time-of- use pricing strategies and are available to support Utilities staff as they consider other opportunities afforded by new smart grid technologies. Though most of the smart grid implementation occurs at the retail level,Platte River stands ready to assist with issues relating to local transmission and generation resources. Again,we look forward to seeing you at the February 3 meeting,where we will seek approval of,the.updated Organic Coiitiact and R' Supply Agreement. Platte River is well positioned to suppoi the City-of`Foi t Collins in.meeting, is goals for the future. Please contact me at any hme.if you-liave any, questions:oi'comments Sincerely, Brian F . Moeck General Manager cc: Steve Catanach Brian Janonis i John Bleem Joe Wilson I , ORDINANCE NO. 026, 2009 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING AN AMENDED AND RESTATED ORGANIC CONTRACT FOR PLATTE RIVER POWER AUTHORITY WHEREAS,the City is one of four member municipalities that have entered into an organic contract establishing Platte River Power Authority ("Platte River"); and WHEREAS, the first such contract was entered into in 1975, and the contract was last amended by the execution of an Amended and Restated Organic Contract Establishing Platte River Power Authority as a Separate Governmental Entity dated July 1, 1998 (the "Existing Organic Contract"), with a termination date of December 31, 2040; and WHEREAS, the parties have recently negotiated a proposed, updated agreement entitled Amended and Restated Organic Contract Establishing Platte River Power Authority as a Separate Governmental Entity (the "Updated Organic Contract"), a copy of which is on file with the City Clerk,dated February 24,2009,that includes certain revisions requested by City Council at previous meetings of the City Council,the purpose of which is to replace and supersede the Existing Organic Contract; and WHEREAS, the Updated Organic Contract, if approved by the parties, would amend the provisions of the Existing Organic Contract so as to: contain preamble statements and purpose statements reflecting Platte River's commitment to environmental stewardship and sustainability; reflect the current manner in which the parties conduct business; expand the kinds of services that Platte River will provide to Fort Collins and obligate Platte River to assist Fort Collins in reaching its renewable energy requirements to develop products and services to improve the efficiency of generation, transmission and use of electrical energy; bring current the dates of the terms of the appointed utilities directors of the member municipalities and allow such directors to attend and fully participate in Platte River meetings by electronic teleconference; and extend the termination date of the Existing Organic Contract by ten years to December 31, 2050. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby finds that it is in the best interests of the City to enter into the Updated Organic Contract, which agreement will supersede the Existing Organic Contract. Section 2. That the Updated Organic Contract in substantially the form on file in the office of the City Clerk and dated February 24, 2009, is hereby approved, and the Mayor is hereby authorized and directed to execute the same on behalf of the City. Section 3. That the City Council hereby directs the Electric Board to annually review the terms and conditions of the Updated Organic Contract and suggest any revisions to the City Council by formal board action. Introduced, considered favorably on first reading, and ordered published this 3rd day of March, A.D. 2009, and to be presented for final passage on the 24th day of March, A.D. 2009. Mayor ATTEST: City Clerk Passed and adopted on final reading on the 24th day of March, A.D. 2009. Mayor ATTEST: City Clerk ORDINANCE NO. 027, 2009 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING AN AMENDED AND RESTATED CONTRACT WITH PLATTE RIVER POWER AUTHORITY FOR THE SUPPLY OF ELECTRIC POWER AND ENERGY WHEREAS, on February 22, 1980, the City and Platte River Power Authority ("Platte River")entered into a Transmission Facilities Agreement(the"Facilities Agreement")to establish the parties' rights and obligations related to their respective electric system facilities and to provide for shared use or lease of certain specified facilities; and WHEREAS, on March 31, 1980, the City also entered into a Contract for the Supply of Electric Power and Energy(the"Existing Supply Contract")with Platte River which establishes the terms and conditions of the City's purchase of electric power and energy from Platte River; and WHEREAS, on July 21, 1998, the City Council approved an amendment to the Existing Supply Contract extending its termination date from December 31,2020 to December 31,2040;and WHEREAS, the City and Platte River have recently negotiated an updated "Amended and Restated Contract for the Supply of Electric Power and Energy" (the "Updated Supply Contract"), a copy of which is on file with the City Clerk, dated February 24, 2009, that includes certain revisions requested by City Council at previous meetings of the City Council,the purpose of which is to replace and supersede the Facilities Agreement and the Existing Supply Contract; and WHEREAS,under the proposed Updated Supply Contract,Platte River will continue to sell and deliver to the City, and the City will continue to purchase and receive from Platte River, all electric power and energy that the City requires for the operation of its municipal electric system; however,the City may also generate power and energy for its own use in City facilities from any new generation resource(s) owned and operated by the City provided that the City's total rated capacity does not exceed 1,000 kilowatts or one percent of the peak load of the City,whichever is greater;and WHEREAS, the proposed Updated Supply Contract also: states that each party will be granted a revocable license to occupy the property of the other party as necessary to deliver and receive power and energy under the Updated Supply Contract in accordance with specified terms regarding the use of certain facilities; allocates costs and maintenance responsibility for certain facilities; outlines the process for the parties to engage in system planning; acknowledges Platte River's contract with the Western Area Power Administration ( WAPA ); requires, as a condition of the purchase of federally generated power, that the City comply with WAPA's General Power Contract Provisions; and amends the term of the Existing Supply Contract so as to extend its termination date by ten years to December 31, 2050. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby finds that it is in the best interests of the City to replace and supercede the Facilities Agreement and Existing Supply Contract with the Updated Supply Contract. Section 2. That the Updated Supply Contract is hereby approved, and the Mayor is hereby authorized and directed to execute the same on behalf of the City in substantially the form on file in the office of the City Clerk and dated February 24, 2009. Section 3. That the City Council hereby directs the Electric Board to annually review the terms and conditions of the Updated Supply Contract and suggest any revisions to the Council by formal board action. Introduced, considered favorably on first reading, and ordered published this 3rd day of March, A.D. 2009, and to be presented for final passage on the 24th day of March, A.D. 2009. Mayor ATTEST: City Clerk Passed and adopted on final reading on the 24th day of March, A.D. 2009. Mayor ATTEST: City Clerk